Nursing home care can be necessary when a person who is medically fragile or has severe memory impairment, confusion & dementia is unable to be effectively cared for in a home care setting. It could be that the home has too many stairs, inaccessible bathrooms or other hazards. It could be that the patient needs higher skilled nursing attention. It could also be that there is no family member who can coordinate and oversee the care. Whatever the reason, sometimes it is necessary to move to a nursing home.
A common belief is that when this occurs “the State takes my house” or “the nursing home takes my house.” Now of course the nursing home has to be paid — until the resident is eligible for Medicaid and files an application, the resident needs to pay the bill for their long-term care. Payment is ordinarily made by a combination of income and savings. The resident shouldn’t ordinarily have to “sign over the house,” though, because if the liquid assets are used up and the house is on the market, the resident can apply for Medicaid since there are no “available assets.” The State cannot place a lien against the house during the resident’s lifetime unless the resident had previously received benefits they weren’t entitled to and the State sued & obtained a judgment for repayment on that.
Does the State “take” the proceeds of sale? No. The resident who is receiving Medicaid benefits will become ineligible for Medicaid the month following the sale if the proceeds are still in his or her account. However, Congress created a Medicaid program with a complex set of laws that provide a variety of ways that individuals can preserve the value of their homes depending on the circumstances. Some of these opportunities are available before the first Medicaid application is even filed, and others are available after the sale.
The important thing is to confer with an elder law attorney to find out which laws can apply to your specific situation. I have met with too many clients over the years — such as disabled veterans and other adult disabled children of nursing home residents — who had never been told that there were ways to preserve substantial assets for their benefit and support. The cried when they heard the good news. http://www.finkrosner.com/medicaid_nj.html
Of course, there can be a State Medicaid lien in the estate if the Medicaid recipient dies before her house is sold … but more on that topic in my next post.
For legal advice concerning Medicaid eligibility and asset preservation, call 732-382-6070