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Can state take a person's house to pay for nursing home care?

If a person who lives alone and has to go to a nursing home and then runs out of money, can the state take that persons house to pay for nursing home care? What can a person do to protect their home?
Status: Open    Sep 14, 2015 - 07:36 AM

Elder Law, Finance

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Sep 16, 2015 - 09:52 AM

Almost any question having to do with Medicaid/MediCal is state-specific, so to be perfectly safe, I suggest you consult with an Elder Law attorney in the state where they live.
That being said, in general, the nursing home doesn't want your house. As long as you are a private-pay nursing home resident, you pay the monthly fee to the nursing home and that is the extent of the relationship. If you can't pay any longer because you have spent all your money, you might be eligible to apply for Medicaid benefits. You have to qualify, so it isn't automatic or easy, but many people do qualify and when they do, Medicaid picks up all the nursing home expenses over and above your monthly income which is essentially your co-pay. Medicaid isn't a freebie though; they want to be repaid whenever they can from wherever they can. Each state is different, but many states will not require the nursing home resident to sell their home before being approved for Medicaid benefits so long as they have "the intent to return home", regardless of the ability to do so. Medicaid will often file a lien on the home for what will eventually be owed back to Medicaid though, so if Medicaid is paying $5,000 per month towards your care, each month the lien is growing by that much. Year One the lien is already $60,000! It must be repaid after the nursing home resident dies, before anyone else inherits it.

You asked about protecting the home and yes, there are several ways to do that but all involve a trip to an Elder Law attorney's office. The money you pay her or him will be recouped many times over by their advice. There are sites that you can go to, AVVO for one, that will help you find an Elder Law attorney. Good luck!

Sep 16, 2015 - 01:47 PM

I am in Alabama so this answer applies to Alabama Medicaid Regulations but Medicaid Regulations are pretty similar in all states. The State cannot take the nursing home resident's home. The nursing home cannot/will not take the house. If the person is out of money and needs Medicaid to pay the bill some things must be done and done correctly to qualify for Medicaid to pay the bill. One of those things is the house must be sold or put up for sale. If sold it must be sold for fair market value which is the tax assessor's value by default. If the house has not sold yet Medicaid will begin paying the bill (assuming everthing else has been done correctly) and place a lien on the property. The lien works much like a mortgage. When the house is sold Medicaid gets paid back first. If Medicaid has paid the nursing home $40,000 then Medicaid gets $40,000 from the sale of the house. The only things that come before Medicaid are the expeneses of selling the house: real estate commission, attorney fee, closing expenses. It is possible to claim an intent to return home and Medicaid will still put a lien on the house and pay the bill. I usually do not like doing this because there are ways to use the money from the house for the benefit of the resident and still qualify for Medicaid.
You should see an Estate Planning or Elder Law Attorney in your area very soon.

Sep 16, 2015 - 02:15 PM

The state doesn’t “take” a person’s home. In Ohio if a single person goes into a nursing home owning a home, that person has 13 months to keep the home after which if they are not able to return home, it must be sold. If the person is now entering a nursing home, there are not many options to protect the home. It can be sold to a family member for 90% of the auditor’s value. It may be able to be protected if that person has other assets with which to plan.
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By sweetpoison46 on Sep 13, 2016 - 08:28 AM | Like (0)  |  Report

In Ohio.... what happens if a home is co-owned. myself and my other half are both on the deed and mortgage. If one is put into a home......funds run out......can the other be forced to sell the home to satisfy the dept or will they just put a lien on the home so if and when it is ever sold they get their money???

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Sep 17, 2015 - 10:16 AM

State law varies when it comes on to what assets are countable for Medicaid for long term care benefits (nursing home). In some states such as Florida, your primary residence (subject to $552,000 equity limit for 2015) is not counted as an assets that affects your qualifications for Medicaid. There are also other planning strategies that can preserve other assets if the person is in a nursing home.

Source: Sophia Lopez, Esq

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