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What is Medicaid’s policy on home ownership

On Behalf of | Dec 6, 2022 | Elder Law

Long-term care for seniors in Pennsylvania is expensive. One of the questions that people ask most frequently is whether Medicaid can seize a senior patient’s residence after they have entered a nursing home to pay for care. The rules for Medicaid are complex, but in most instances, you probably won’t have to surrender the home or relinquish proceeds from its sale if you or your loved one enter nursing home care.

What are Medicaid’s long-term guidelines?

Medicaid’s rules under elder law indicate that an individual’s primary residence is exempt when applying for Medicaid benefits. However, your home’s equity will come into play when determining benefits. The minimum amount in 2022 is $636,000. You can calculate your equity by discovering your home’s fair market value minus any debts owed. In some high-value areas, your minimum equity may be higher.

Exemptions can also occur under other circumstances, including:
• The senior’s spouse lives in the home
• The senior’s minor child lives in the home
• A blind or disabled child lives in the home, along with a caregiver

For the third point, you can transfer the ownership of the home to the adult child for a nominal fee. In some situations, an applicant’s sibling can also apply to own the home.

Although Medicaid won’t take ownership of a home while an individual is still alive, your state Medicaid agency may file a claim after death to recover funds paid while that individual received care in a Medicaid-certified nursing home.

Begin Medicaid planning as soon as possible

Determining how to pay for long-term care is complex. Medicare will pay for short-term care in a nursing home, but not when the stay becomes permanent. Many family members believe that nothing can be done once a loved one enters a nursing home.

Although you have a short window to take emergency steps to protect assets once your loved one enters a nursing home, advanced planning is the best course of action. Medicaid has a five-year look-back period, so try to plan asset management as soon as possible when someone’s health begins to decline.