Elder Law Practice of
Douglas R Jones &
Cynthia Orlicek Jones

This is a widespread rumor. You or your parent(s) have worked a long time and paid off the home. You hope and pray that your spouse or parent never have to go to a Nursing Home. But sometimes it’s inevitable. Probably one of the first thoughts that pop in your head is what someone told you a while back. You start wondering, “Can Medicaid take Mom’s home?” or “Can the Nursing Home take Mom’s home?”

The short answer is YES. 😨

But then why is this a myth? Well, because it doesn’t happen in the way most people portray AND it doesn’t have to happen. With proper planning, it’s possible to save the house and other assets.

Why Do A Medicaid Myth Series?

People frequently contact us during one of the biggest challenges they will face. An aging parent has suffered a health crisis and is going to the nursing home very soon. Sometimes that very day. This puts a huge strain on the family, which has many big decisions to make and not much time in which to make them.

To complicate things, there has often been a lot of well-meaning advice handed out by friends, neighbors, and relatives. There are discussions about how to qualify for Medicaid assistance to pay for long-term care. Most of this free advice is worth just what it costs. As a result, families are making one of their biggest decisions based on mostly false information.

We understand the family is stressed out and burdened by a bunch of half-truths. To help cut through the clutter. We are going to discuss three of the biggest Medicaid myths that we hear repeated on a regular basis. This blog post focuses on Medicaid Myth #1.

Medicaid Myth #1: The Nursing Home Can Take Mom’s Home.

This just isn’t true. At least, not how most people portray it. We’ve heard numerous myths about the Nursing Home taking everything from their residents including the home.

Unless there is an agreement to give it to the Nursing Home or they have filed a lawsuit against Mom for non-payment of a nursing home bill, they would not have any access to the home whatsoever.

Does The Nursing Home Even Want Mom’s Home?

Even if the Nursing Home could take Mom’s house, it’s not wanted. The Nursing Home just wants to be paid. They know that if Mom comes into the facility straight from the hospital, Medicare will pay for her care up to 100 days (assuming she qualifies for rehab). After this period of time, she is on her own.

“On her own” means that Medicare will no longer pay. Until she is eligible to receive Medicaid benefits, she will have to pay the nursing home daily rate. This is usually around $180-$225 per day, out-of-pocket. When she has met all Medicaid eligibility criteria and has spent down to a certain point, which we’ll discuss in an upcoming post, she may be eligible to receive Medicaid assistance. The nursing home will be paid through Medicare, Private Pay (aka your pocket), and eventually when the previous two run out… Medicaid. Notice your Mom’s house wasn’t listed as a source of payment.

NOTE: We’ve met plenty of people who were either NOT told by the Nursing Home that they could get Medicaid when they run out of money OR they forgot OR misunderstood.

However it happened, these people have run up credit cards, taken personal loans, home equity loans and reverse mortgages to pay the Nursing Home bill. Please don’t do this.

If you’re worried about your Loved One’s property, money, and other resources being lost to Nursing Home costs, click here to set a free 10-minute phone consult to see if we can help.

How Does Mom Get Medicaid?

To receive Long Term Care Medicaid, a person must be medically needy, must be income eligible, and must be resource eligible.

  • The nursing home will assess a potential new long-term care resident to determine whether he or she is medically needy so as to require a nursing home level of care.
  • Income eligibility means that the person is receiving less than $2,313 per month. If he or she is receiving more income than this, we can often resolve the issue through the preparation of a Miller Trust.
  • A person must also be asset eligible to receive Medicaid assistance. We’ll discuss resource eligibility/exempt/non-exempt resources further along in this series.
  • For now, just know that the Home is a resource that can be exempt from counting toward the $2,000 total resource limit.

Can Medicaid Take Mom’s Home?

This one is actually true. It’s just not how you probably think. In Arkansas, the Department of Human Services’ (DHS) Third Party Liability (TPL) division does NOT go after the property while the Nursing Home resident is still alive. They are required by Federal law to practice Estate Recovery.

They wait for the resident to pass then total up ALL expenses paid for by Medicaid. At this point, they will claim against any property/resources belonging to the estate of the recently deceased. This is one of the reasons an exclusion is allowed in the first place.

This means if Medicaid paid $120,000 over a two year period (easy to do) and the home is worth $100,000 then all proceeds from the sale of the home would belong to Medicaid. Assuming they’ve placed a lien on the home, this also means you can’t transfer the property from the estate without paying.

How do I protect the home and other resources?

If you have a loved one that is going to the nursing home soon or one who is already there and is paying for care out-of-pocket you have options. One way to protect the home is by a valid transfer to a minor or disabled child, or to a caregiver child that lived with the parent.

While the house can be excluded if a spouse or child is living there it does not protect against estate recovery. A transfer of the home must occur. However, if the deed is not done correctly the house could end up back in your Loved One’s hands. Because of this, there are some instances where a penalty period would be imposed; however, there are ways to reduce this penalty by a substantial amount.

For more information and to see how we can help you, click below.

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There may be actions that can be taken to save a substantial portion of assets including your Loved One’s Home!

Frequently Asked Questions

Can Medicaid Take my house?

Yes, as part of an estate recovery program.

Can Medicaid Take your home after death?

Yes, this is the only time they would do so.

Can the nursing home take my mother’s house?

No. Unless you have assigned the house to them or she is being sued for lack of payment. This normally would not happen as when she runs out of money she would apply for Medicaid assistance.

Does owning a home disqualify me from Medicaid?

Nope, unless it’s over the state specified limit. In Arkansas, that number is $585,000

Can Medicaid Take your Home if it is in a Trust?

No. But this is also why a home in a Revocable Trust is counted as a resource. This would prevent Medicaid Eligibility. If you transferred the home to an Irrevocable trust in the last 5 years this would be an uncompensated transfer and cause a penalty period.

Can Medicaid take your inheritance?

Yes. Though inheritance needs to be defined further. Medicaid has an Estate Recovery policy that requires the State to try to recover against the estate of a Medicaid recipient when they pass. Since the qualification for Medicaid is being destitute, generally the only thing to worry about would be the home.

Please keep in mind that in order to get Medicaid you may have to spend the rest of the inheritance before you can get Medicaid. There are ways to prevent this and you would need to speak with an Elder Law Attorney.

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Disclaimer: The information provided on this blog is intended as general information only for a broad audience. It is not intended as legal advice and should not be acted upon as such. If any reader has questions or concerns about any matter mentioned herein, he/she should contact an Elder Law Attorney or another appropriate professional. If you need help now, give us a call at 501-843-9014.