Can Someone Transfer Property Prior to Entering Nursing Home and Still Get Full Medicaid Coverage?

A fellow caregiver asked...

Can a person perform a transfer of property prior to entering nursing home and still get full Medicaid coverage without incurring a penalty?

Expert Answer

There are three circumstances in which persons who qualify for Medicaid coverage for nursing home care can transfer their own house to a family member without incurring any penalty from Medicaid, and without giving Medicaid any right to reimbursement from the house.

General rules: Ordinarily, an unmarried (single, divorced, or widowed) person entering a nursing home may keep his or her own house without the value of the property disqualifying the person from full Medicaid coverage of the nursing home costs. However, in that situation, Medicaid would be entitled to a lien against the house equal to the total amount Medicaid spends on nursing home care over the lifetime of the home owner. Medicaid can then collect on that lien when the nursing home resident dies.

If, on the other hand, the person entering the nursing home has given the house away to family members (or anyone else) within five years of applying for Medicaid nursing home coverage, Medicaid would have no right to reimbursement from the house. However, Medicaid transfer rules could mean a delay of months or years before Medicaid would begin paying for the nursing home.

Special circumstances: Three circumstances permit someone to transfer the home to a family member without either a Medicaid delayed-coverage penalty or a Medicaid lien on the property. A home may be transferred, without penalty or lien, to:

  • The person's adult child, if: (1) the child has lived in the house for at least two years prior to the parent moving into the nursing home; (2) during that time the child cared for the parent; and (3) that care allowed the parent to remain at home for that time instead of entering a nursing home.
  • The person's minor child, or blind or disabled child of any age.
  • The person's brother or sister who had an ownership interest in the property from before the five-year look-back period and has lived in the house for at least the previous year.