If I Apply For Medicaid, Is My Home An Exempt Asset?
The worth of one’s home is not exclusively a number tied to equity, sale price or fair market value. Familiarity, security, comfort and accessibility are also valuable attributes. Illness can alter the arithmetic, especially when Medicaid for long term care is sought. The two major Medicaid Long Term Care Programs - Institutional Medicaid (Nursing Homes) and Community Medicaid (Home Care, Assisted Living) classify a Medicaid Applicant’s home differently. Knowing the rules will help you plan ahead so that your home can be protected.
The first rung on the Medicaid Ladder is Community or Home Care Medicaid. A new 30 month lookback is about to be introduced this October 1st on all applicant’s accounts and transfers which will impact both Home Care and Assisted Living Medicaid Applications with possible penalties. In 2020, an applicant is limited to $15,750 in resources, but they are allowed to own a home that has an equity value of less than $893,000. If the applicant’s spouse still resides in the home than there is no equity limit. If the Community Medicaid Application is for ALP Level 3 or Assisted Living Medicaid then an unmarried applicant may have to consider transferring the home to an Irrevocable Trust or to other individuals before October 1, 2020, otherwise the property would become an available resource upon the applicant’s admission to the facility, impacting eligibility or triggering a lien placement.
Similar issues arise with Institutional Medicaid and an unmarried applicant who enters a Nursing Home while owning a home. The 5 year (60 month) lookback for Nursing Home Applications has been in place for 15 years (longer for Trust Transfers) which is an obstacle for emergency Medicaid Planning involving home transfers if there is no spouse or other exempted person to be able to complete the transfer. Medicaid Liens and estate recovery could eat up the home’s equity.
Applying for Medicaid while owning a home will not necessarily be problematic for eligibility purposes, but the home becomes exposed as the Medicaid Process continues. There are tools that elder law professionals utilize to shield the home from untimely incursions. Intent to Return Letters executed by the applicant provide basic protection to their owned residence upon entering a Nursing Home with the expectation that the applicant has every intention of returning home to continue to receive care.
Spousal Transfers are not penalized. However, if both spouses are ill and require long term care or one passes away while the other spouse is still receiving Medicaid benefits then the implications can be far reaching. Smart planning can anticipate some of these scenarios.
Until this year, New York State’s Medicaid regulations tended to be more favorable towards middle class applicants who tried to balance their long-term health care needs with the high taxation and cost of living in New York. There were well-defined planning approaches for shielding a family’s home and preserving the decades of saving and support that a home provided. Things are about to change. Contact the professionals at Sloan and Feller today for more information on protecting your home.