Q: My mothers companion has
lung cancer and is in a nursing home, which his private insurance covers only for the
first 100 days. We have started an application for Medicaid to cover the rest of his stay,
but weve heard that he might lose his house in the process. How does that work?
A: For the past several years states have
been getting much more aggressive about going after the homes and other assets of deceased
Medicaid recipients. On first glance, this sounds like a pretty cold-hearted enterprise.
After all, to be eligible for Medicaids help with your nursing-home bills you
cant have much. But states, which share the cost of Medicaid with the federal
government, are watching their spending on this medical program for the poor skyrocket as
more middle-class people use Medicaid as nursing-home insurance. Since our country has not
dealt with the issue of paying for long-term care, other than recommending and offering
tax incentives to encourage people to purchase long-term care insurance for themselves,
Medicaid is then often the only place middle-class and low-income Americans can go for
help with expensive nursing-home bills. The Medicaid program paid 47 percent of the
nations nursing-home bills in 1997, and its only going to get worse as the
number of elderly people in this country rises.
So now you
know why government bureaucrats may be interested in taking your friend's home if he dies
after being cared for by Medicaid. That doesn't mean, however, that there's nothing you
can do to preserve some of his estate for any relatives who might like to live in his
Unfortunately, giving precise advice is tricky, since
each state handles this issue differently. Some, such as Oregon and Wisconsin, have
extensive dragnets to ensure they get the highest reimbursement from a Medicaid patient's
estate even for regular medical care, not just nursing-home stays. Others, such as
West Virginia, have chosen to be abit more liberal and let families keep some
are some basics that everyone should know about this rather hidden area of bureaucracy:
|Each state is required to seek reimbursement for
nursing-home care, federal law says.|
|The state has to provide an exception for
hardship cases, but each state can define what that means. |
|The state can go after property only upon the
Medicaid recipient's death.|
|The state can't force the sale of a house if
it's still occupied by a surviving spouse, a child under age 21 or an adult, disabled
|To even qualify for Medicaid's help, you can
have up to $2,000 in the bank, plus own a home and a car.|
|Remember that Medicare is a separate program
it covers health care for the elderly and disabled and offers only limited
long-term care benefits. That's probably the insurance plan along with a medicare
supplement policy that's paying for 100 days of your friend's stay at the nursing home. |
You should try to understand how your state's
Medicaid program works before you start filling out the forms, because there might be some
strategy you can use to make sure the family home doesn't end up on the auction block. You
may want to consult with an elder-law attorney who is familiar with Medicaid, advises
Herbert Semmel, an attorney in Los Angeles with the National Senior Citizens Law Center.
But don't get just any old estate-planning attorney, Semmel says many of them are
used to working with clients with estates over $1 million, and strategies for that type of
estate could backfire for someone navigating the intricacies of Medicaid. Be sure the
attorney knows elder law and knows Medicaid in your state. Try the National Academy of Elder Law
Attorneys for a referral.
If you've heard about the government's
crackdown on creative ways of hiding assets to become eligible for Medicaid, the feds did
pass a law "criminalizing" such asset hiding or advising someone how to do so.
You need to be very careful about transferring assets
to family members other than spouses, because there can be implications both for Medicaid
eligibility and for taxes. Setting up trusts and other complicated matters are definitely
best handled with a lawyer's help.
Medicaid caseworkers can help you figure out your
eligibility, but don't depend on one to help plan your estate or hide assets from the
For more information, try:
|The Medicaid program's Web site.
See this for the driest, most bureaucratic but accurate treatment of the subject
|The Eldercare Locator. This is a national
resource for finding local information on health-care issues for the elderly. Call (800)
Long Term Care Return