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Does Medicaid have a right to house acquired by quit claim deed?

My father transfered his house to me 2 years ago by doing a quit claim deed. The house and taxes are now in my name. Does medicaid have any rights to this asset if my dad was to apply for medicaid now?

The transfer penalty is a bit confusing. the house is worth 150,000. in PA the amout is 8900 a month. So that is 16-17 months. When does that clock start?
Status: Open    Apr 04, 2016 - 11:06 AM

Medicare/Medicaid, Elder Law > Estate Planning

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Expert Answers

Apr 06, 2016 - 08:37 AM

I strongly recommend seeking the advice of a qualified Elder Law attorney in your state. Generally speaking though, Medicaid has the right to review any financial transaction within 60 months of filing an application for Medicaid benefits. If the house was transferred within that 60 month "lookback period", then Medicaid will give him a simple choice. He can either reverse the transfer or he can pay the penalty for the transfer. You don't have to give it back though. Medicaid can't make you give it back but if you don't give it back and if you don't pay the penalty, your father will not be given Medicaid benefits.

As for the clock beginning on the transfer, an Elder Law attorney there can advise you specifically but here it begins on the date of application for benefits.

Apr 12, 2016 - 08:11 AM

Generally, unless an exception applies, Medicaid will consider that transfer of the house to you a “transfer” for Medicaid eligibility purposes and will apply the transfer penalty. The national norm is that the transfer penalty of 16-17 months will not begin until your father has moved into a nursing home, he has spent down his assets for Medicaid eligibility, he has applied for Medicaid coverage, and he has been approved for coverage but for the transfer. Therefore, the 16-17 month “clock” will not start until your father has no more assets to pay for nursing home care, unfortunately. This can vary from state to state, but it is the norm.

Some exceptions may apply. If you are blind or disabled, the transfer will be exempt. If you have lived in the house taking care of your father for the last 2 years, the transfer will also be exempt.

In some states, this transfer penalty can be “cured” if the interest in the house is returned in its entirety to the Medicaid applicant. Consult an elder law attorney in your area for more information.

Apr 19, 2016 - 09:00 AM

The transfer by Quit Claim Deed is considered a gift. Medicaid disallows any gifting five years prior to the date on which Medicaid is desired to start. Therefore, Medicaid would penalize your father in the amount of the transfer, meaning that benefits would be delayed for the amount of time that he could’ve used the value of the home to pay for his care. One way to avoid the penalty would be to transfer the house back to your father.
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