Paying for assisted living, can relative keep their house?

[Anonymous]

So I am a bit confused about this. Realiitive has decided to move from their single family house to an assisted living apartment. Her idea is to sell the house to self pay for the assisted living place. She is single so no one else lives in the house with her. I am wondering if their is a way for her to keep her house (either in a trust or in her name) and spend the rest of her money on the assisted living place until she runs out of money and then go into a place that accepts Medicaid. My thinking is that she can get Medicaid while keeping the house and she can rent the house out until she runs out of money and use the rent to help pay for the assisted living place. Am I missing something? Or would this work? Should I post on the over 50 board too?

[Anonymous]

Why keep the house? Assisted living is insanely expensive. Most people sell their homes first. Her assets will likely be too high to qualify for assistance (Medicaid).

[Anonymous]

Sounds like heirs want to keep the house for inheritance. It doesn’t work that way.

[Anonymous]

If she keeps the house, how will she pay for assisted living?

She better have lots of equity, too. Assisted living is $6k/month or more.

[Anonymous]

What is your concern about selling? Do you want the house at some point?

[Anonymous]

she can rent the house out until she runs out of money and use the rent to help pay for the assisted living place.

Someone in assisted living doesn't want to be a landlord. Who is going to do property management/maintenance. Not her. You? It costs money to own a rental. You need a cash buffer for times when it's vacant. Does she have it? How would she pay for assisted living if it was vacant six months? Unless she has owned rentals in the past, this sounds untenable.

[Anonymous]

That is fraud. If you have assets, you use them to pay. You cannot gift them to family, you cannot hide them. They pay attention to these things and will come after people - happened to a relative of mine when she was gifted funds by her elderly parents. She had to pay the money back. I now have 2 elderly aunts in assisted living in NY, they are probably the only full payers in the place. They would love to gift some of their savings to their great grand nieces, but cannot as it is fraud if its more then a few hundred bucks.

[Anonymous]

Medicaid is available to those without or with limited assets. If she owns a house, she doesn't fall into those categories. I don't believe it is like bankruptcy in some states (such as FL) where you get to keep your primary residence, regardless of value.

[Anonymous]

If she rents the place out that is income - which would likely put her above the level qualifying for Medicaid.

[Anonymous]

In general, you should be aware that an elderly person can go on Medicaid for long-term care while owning a home but Medicaid puts a lien on their real property, and there is a clawback provision which goes back 5 years, meaning any transfer of real property, including putting into a trust, would be pre-empted by Medicaid.

There are provisions (not real familiar but aware they exist) where if a person meets Medicaid criteria for long-term care but stays in their home with care provided by a family member (probably could be someone unrelated as well) and receives Medicaid-funded care, the services provided by the caregiver protect some or all of the real property from Medicaid liens.

I worked for awhile as a home health aide, and we had clients whose family had them move into senior housing and privately paid for the home health aide services to save money compared to having Medicaid liens on their parents' home and other assets. If the elders could get by without 24 hour care and the family handled doctor appointments and grocery shopping, it seemed to work for them.

[Anonymous]

Also, long term care under Medicaid is not simply needing a place to live, there is a level of services the person requires in order to qualify. If the person does not meet the level of need, then a long term care facility is not an option. In those cases, if money has become an issue, it comes down to subsidized housing, usually in a senior living facility.


From and elder law site about Medicaid myths:

You need to be broke to qualify for Medicaid:

Medicaid helps needy individuals pay for long-term care, but you do not need to be completely destitute to qualify. While in general a Medicaid applicant can have no more than $2,000 in assets in order to qualify, this figure is higher in some states and there are many assets that don't count toward this limit. For example, the applicant's home will not be considered a countable asset for eligibility purposes to the extent the equity in the home is less than $552,000, with the states having the option of raising this limit to $828,000 (in 2016). In all states, the house may be kept with no equity limit if the Medicaid applicant's spouse or another dependent relative lives there. In addition the spouse of a nursing home resident may keep one half of the couple's joint assets up to $119,220 (in 2016). For more information on Medicaid’s asset rules, click here.
To qualify for Medicaid, you should transfer your money to your children. Medicaid law imposes a penalty on people who transfer assets without receiving fair value in return. This penalty is a period of time during which the person transferring the assets will be ineligible for Medicaid, and the length of the penalty period is determined, in part, by the amount of money transferred. The state will look at all transfers made within five years before the application for Medicaid. That doesn't mean that you can't transfer assets at all -- there are exceptions (for example, applicants can transfer money to their spouses without incurring a penalty).

And from Nolo:

Medicaid Estate Recovery
The federal government has an established policy requiring that all states must try to recover the costs paid on behalf of those who received certain types of Medicaid coverage during their lifetime. All states attempt to recover long-term care costs, including home health services and hospitalizations while in long-term care, and some try to recover regular Medicaid costs as well (though they can generally only recover costs paid for those who were 55 or older or institutionalized when they received Medicaid benefits).
When an individual becomes eligible for Medicaid, federal law requires that the state send the individual a written notice describing the rights of the state to recover Medicaid-paid medical costs following the individual’s death.

[Anonymous]

Medicaid does not pay for assisted living. Only nursing homes. She's right to sell it so she doesn't have upkeep.

[Anonymous]

Anonymous wrote:Also, long term care under Medicaid is not simply needing a place to live, there is a level of services the person requires in order to qualify. If the person does not meet the level of need, then a long term care facility is not an option. In those cases, if money has become an issue, it comes down to subsidized housing, usually in a senior living facility.


From and elder law site about Medicaid myths:

You need to be broke to qualify for Medicaid:

Medicaid helps needy individuals pay for long-term care, but you do not need to be completely destitute to qualify. While in general a Medicaid applicant can have no more than $2,000 in assets in order to qualify, this figure is higher in some states and there are many assets that don't count toward this limit. For example, the applicant's home will not be considered a countable asset for eligibility purposes to the extent the equity in the home is less than $552,000, with the states having the option of raising this limit to $828,000 (in 2016). In all states, the house may be kept with no equity limit if the Medicaid applicant's spouse or another dependent relative lives there. In addition the spouse of a nursing home resident may keep one half of the couple's joint assets up to $119,220 (in 2016). For more information on Medicaid’s asset rules, click here.
To qualify for Medicaid, you should transfer your money to your children. Medicaid law imposes a penalty on people who transfer assets without receiving fair value in return. This penalty is a period of time during which the person transferring the assets will be ineligible for Medicaid, and the length of the penalty period is determined, in part, by the amount of money transferred. The state will look at all transfers made within five years before the application for Medicaid. That doesn't mean that you can't transfer assets at all -- there are exceptions (for example, applicants can transfer money to their spouses without incurring a penalty).

And from Nolo:

Medicaid Estate Recovery
The federal government has an established policy requiring that all states must try to recover the costs paid on behalf of those who received certain types of Medicaid coverage during their lifetime. All states attempt to recover long-term care costs, including home health services and hospitalizations while in long-term care, and some try to recover regular Medicaid costs as well (though they can generally only recover costs paid for those who were 55 or older or institutionalized when they received Medicaid benefits).
When an individual becomes eligible for Medicaid, federal law requires that the state send the individual a written notice describing the rights of the state to recover Medicaid-paid medical costs following the individual’s death.

Its unethical to transfer money like that and there is a 5 year hold back. Medicaid does not pay for assisted living so she needs to sell in less she has enough cash to pay.

[Anonymous]

Anonymous wrote:In general, you should be aware that an elderly person can go on Medicaid for long-term care while owning a home but Medicaid puts a lien on their real property, and there is a clawback provision which goes back 5 years, meaning any transfer of real property, including putting into a trust, would be pre-empted by Medicaid.

There are provisions (not real familiar but aware they exist) where if a person meets Medicaid criteria for long-term care but stays in their home with care provided by a family member (probably could be someone unrelated as well) and receives Medicaid-funded care, the services provided by the caregiver protect some or all of the real property from Medicaid liens.

I worked for awhile as a home health aide, and we had clients whose family had them move into senior housing and privately paid for the home health aide services to save money compared to having Medicaid liens on their parents' home and other assets. If the elders could get by without 24 hour care and the family handled doctor appointments and grocery shopping, it seemed to work for them.

This is state specific. Some states pay for an aide, some do not. MD does not in less you go into a nursing home under medicaid and then are discharged back "home" but they only provide a few hours a day a few days a week.

[Anonymous]

Anonymous wrote:

Anonymous wrote:In general, you should be aware that an elderly person can go on Medicaid for long-term care while owning a home but Medicaid puts a lien on their real property, and there is a clawback provision which goes back 5 years, meaning any transfer of real property, including putting into a trust, would be pre-empted by Medicaid.

There are provisions (not real familiar but aware they exist) where if a person meets Medicaid criteria for long-term care but stays in their home with care provided by a family member (probably could be someone unrelated as well) and receives Medicaid-funded care, the services provided by the caregiver protect some or all of the real property from Medicaid liens.

I worked for awhile as a home health aide, and we had clients whose family had them move into senior housing and privately paid for the home health aide services to save money compared to having Medicaid liens on their parents' home and other assets. If the elders could get by without 24 hour care and the family handled doctor appointments and grocery shopping, it seemed to work for them.

This is state specific. Some states pay for an aide, some do not. MD does not in less you go into a nursing home under medicaid and then are discharged back "home" but they only provide a few hours a day a few days a week.

Notice I said "privately paid" -- Medicaid was not involved at all and these were also not services that would be provided under Medicaid definitions. This was the kids' strategy to provide care while keeping costs down to preserve assets and avoid Medicaid. IDK what you are referring to about Medicaid in MD, it doesn't make much sense. Since you put quotes around 'home' you must not have meant home, not sure what you did mean.