It’s Not Debtors Prison But Pretty Close

Posted on January 25, 2015

Can the state actually take your home for medical bills? Under certain conditions the answer is yes and it targets the elderly specifically. This federal law has been a well-kept secret since its inception in 1993 when all states had the option since Medicaid began in 1965 to recover some medical cost from recipients after they die. However, it was optional and states could only recoup Medicaid costs spent on those 65 years or older. When Congress passed the 1993 omnibus budget bill it “required” states to recover the expense on long-term care and related costs for deceased Medicaid recipients at 65 or older. The affordable care act did nothing to change this existing federal law. It did however move the age backward to 55 years old after considering the aging baby boomer population on the horizon. That puts potentially more estates on the hook for Medicaid reimbursements after the beneficiary dies. Medicaid is a joint federal-state program and as in any other program receiving money from the federal government, can be penalized for not complying with federal criteria.

So what does that mean exactly? It simply means that if you or your parent or your grandparent owns a home or property and is over the age of 55 could find themselves in a position of a lien on their home to recoup Medicaid spending after they die. No one expects to be a user of the Medicaid program but long-term illnesses or severe accidents that can cap out the best insurance policy can land us there in a matter of days. The services that the state Medicaid program seek recovery for is nursing facility services, home and community-based services, and related hospital and prescription drug services. There are “some” stipulations that could keep them from placing a lien on the individual’s home. The areas where states may not recover monies is if the individual is survived by a spouse who lives in the home, a child under 21, or blind or disabled child of any age living in the home. However, considering this age group that criteria usually does not apply.

The best advice of course, if you can financially afford it, is to talk with an Elder Law attorney in your local state. If you cannot afford one however here are some thoughts that might help you out.

• The “look back” period to transfer property in order to be eligible for Medicaid is five years. Most times people don’t have this option as a sudden illness appears unexpectedly. But if you think you have the time to put your home in a loved one’s name or friend before something happens that would be the best course of action.
• If there’s no one to leave the property to think of selling and using the money to sustain a lifestyle out of the nursing home and in your own control. You might be able to trade down to a smaller more accessible home.
• You might even look into the reverse mortgage programs. If you qualify the money can help you stay out of the system by enabling you to remodel accessible features and give you control and independence that would allow you to remain in your own home.

Being proactive is the only way to ensure your house and property goes where you wanted to. You can research Medicaid Estate Recovery and liens on the web to get more information. You can also go to the website http://www.swcil.org and request free information. This is a nonprofit Center for Independent living serving people with any and all disabilities. They have many resources available and are always willing to assist you free of charge.