Nursing Home Medicaid for Married Couples – Protecting the House from Medicaid Recovery

A nursing home resident can own a home and still qualify for Medicaid. The home, however, can be subject to Medicaid estate recovery after the resident dies. When Medicaid helps pay for nursing home care, the state must attempt to recoup from the beneficiary’s estate whatever amount was paid on the resident’s behalf; this is called estate recovery. Since Medicaid rules limit the number and amount of assets a resident can own, the only property of substantial value that a Medicaid recipient is likely to own at death is his or her home. So, what if there is a spouse still living in the house? If a spouse (or a disabled/blind child, a child under age 21, or a sibling with an equity interest in the house) lives in the house, the state cannot file a claim against the house for reimbursement of Medicaid nursing home expenses. However, once the well spouse (or dependent relative) dies or moves out, the state can try to collect. But the state cannot recover if the house is in the well spouse’s name and the nursing home resident has relinquished his/her interest. Although Medicaid penalizes the beneficiary for any transfers made 60 months prior to applying for Medicaid, there are circumstances in which it is legal to transfer a house. Transfers of the home can be made to the following individuals without incurring a transfer penalty:
• A spouse;
• A child who is under age 21 or who is blind or disabled;
• A sibling who has interest in the home; or
• A “caretaker child,” who is defined as a child of the applicant who lived in the house for at least two years prior to the applicant’s institutionalization and who during that period provided care that allowed the applicant to avoid a nursing home stay.
There are ways to protect the home from Medicaid estate recovery. The rules are tricky, so be sure to consult with a knowledgeable, experienced elder law attorney. If you or someone you know has questions about how these rules could work for them, please call our office for a complimentary consultation at (404) 843-0121.