Will I lose my share of my home to Medicaid?

1 answer | Last updated: Oct 04, 2016
Worried daughter15 asked...

My mother has medicare/medicaid, state of california. We are joint owners of our house. I just found out when she dies the goverment/medicaid will go after her assets, the home being the only thing she has, to pay for the medical expenses they paid. Does this mean I lose my house? I am a co-owner, I make payments on the property, will the goverment take my share of the house and I lose it all? will they make me sell it? I do not own any other property just this house.

Expert Answers

You are in the same position as a lot of folks, co-owning a home with a parent who receives medical or long-term care from Medicaid (called Medi-Cal in California). The short answer is that Medi-Cal will have a claim against the value of your mother's estate when she dies, but that it has no claim against your share of the house. (Medicare, by the way, makes no such claims for repayment.)

The basic rule is that Medi-Cal has a right to repayment from the estate of someone for whom Medi-Cal has covered their medical or nursing home or other long-term care expenses after the age of 55. Since most people who qualify for Medi-Cal only have their home as a valuable asset at the time they die, Medi-Cal usually seeks this reimbursement out of the value of the house. The simple idea behind this is that even though someone is allowed to keep their valuable home while Medi-Cal pays their medical or long-term care bills, that person's heirs should not be able to keep the amount of money that Medi-Cal -- and not the family -- paid on behalf of the parent. So, when a Medi-Cal beneficiary dies, Medi-Cal seeks repayment out of the value of the house, sometimes ending up placing a lien on the house.

However, several parts of the Medi-Cal reimbursement rules may help protect your house. First, Medi-Cal can seek reimbursement from your mother's estate only up to the value of HER ownership share in the property. In other words, they cannot touch your share of the house. A big question will be how much of the house is owned by her and how much by you. That will be determined by your ownership agreement and the deed, and on evidence you have concerning who has paid for the house.

When the State of California seeks reimbursement out of your mother's share of the house, it will not necessarily force you to sell the house but will give you some leeway about how to make the repayments. One possibility is for you to take out a new mortgage on the home and use the money to repay the state. Another possibility is to set up a payment schedule that allows you to repay the state a little at a time. If neither of these is workable because of your financial situation, there is also the possibility that Medi-Cal would grant you a hardship waiver that would excuse the repayment of some or all of your mother's debt. If none of these options works, Medi-Cal can place a lien on the house. But only as a last resort -- if no other payment option or waiver is granted -- would Medi-Cal attempt to execute the lien by forcing the house to be sold.