We don’t know where it originated but there is a myth that Medicaid “takes your home”. This is wrong. Medicaid does not take your home. In fact, Medicaid does not take anything during your lifetime or the lifetime of your spouse. When both you and your spouse pass away, Medicaid, through Estate Administration Unit (EAU), may have a claim against the estate of you or your spouse, but only up to the amount Medicaid paid for care.
When applying for long-term care benefits, your resources are considered during the qualification process. DHS may determine that you have too many resources or must use some before qualifying or continuing to qualify for Medicaid. Sometimes we have difficult decisions to make, for example, you may have to sell resources such as a second car or cash in life insurance policies before qualifying. Spending down is a choice you’ll make to qualify for benefits; the program is voluntary, so you are not forced to apply or spend.
If you and your spouse have a home and Medicaid paid for long-term care (LTC) for one or both of you, Medicaid might have to be paid back or reimbursed for expenses paid on your behalf before your heirs can inherit the home. This can be resolved in a few different ways such as through a sale, refinance, or alternate funding to pay the claim.
There are some exceptions to when resources are claimed by the State – usually when the state is being reimbursed elsewhere – for example, when they beneficiary of an annuity or there is a residual amount in an income cap trust. These payments are never sought before the Medicaid recipient dies.
Medicaid doesn’t take personal property (i.e. couches, clothes, jewelry, kitchenware, etc.), vehicle(s), or pets after a recipient or spouse dies nor does it control your income, bank accounts etc.
One way to resolve Medicaid having a claim against your estate is often addressed when a person or couple sells an excluded resource. The person or couple can voluntarily pay back Medicaid for all or most of the claim balance. If there is resource remaining after the pay back, there may be another spend down period before reapplying for long-term care.
A second way to resolve Medicaid having a claim against your estate is transferring assets out of your control, such as into an irrevocable trust. However, these transfers come with penalties, so never transfer without speaking to an attorney that specializes in Medicaid planning.
This is a complicated area of law. It may be best to seek counsel from an experienced Elder Law attorney if you are faced with long-term care decisions for you or a spouse. There are ways to protect assets and strategies for spending down. Come prepared to any meeting you have with an attorney so they understand the full picture and can give proper advise.
For more information visit: http://www.dhs.state.or.us/spd/tools/additional/generic/k.htm.
This article is for informational purposes only and does not constitute legal advice, nor does it establish an attorney-client relationship. For a consultation with an attorney at NW Estate Law, LLC, please visit www.NWEstateLaw.com, call (503) 543-1121, or email Cody@NWEstateLaw.com to schedule a meeting with Meredith Williamson about your specific case.