Will I Lose My Home?
Many people who apply for Medicaid benefits to pay for nursing home costs ask this question. For many, the home constitutes much or most of their life savings. Often it is all the couple has to pass on to their children.
Under the Medicaid regulations, the home is an exempt asset (so long as the equity value is less than $500,000). This means its value is not taken into account when calculating eligibility for Medicaid benefits. But in 1993, Congress passed a little-debated law that affects hundreds of thousands of families with a spouse or elderly parent in a nursing home. That law requires states to try to recover the value of Medicaid payments made to nursing home residents. Estate Recovery does not take place until the recipient of the benefits dies (or until both spouses are deceased if it is a married couple). Then, federal law requires that states attempt to recover benefits paid from the recipient’s probate and in some cases non-probate estate. Generally, the probate estate consists of assets that the deceased owned in his or her name alone without beneficiary designation. The non-probate assets include assets owned jointly or payable to a beneficiary.
About two-thirds of the nation’s nursing home residents have their costs paid in part by Medicaid. Obviously, the Estate Recovery law affects many families. The asset most frequently caught in the Estate Recovery web is the home of the Medicaid recipient. A nursing home resident can often own a home and receive Medicaid benefits without having to sell the home. But upon death, if the home is part of the probate or non-probate estate, the state may put a lien on the property in the amount necessary to reimburse the state for the Medicaid payments that were made.
The state of Georgia recently began a Medicaid Estate Recovery Program. Fortunately, there are ways to protect your property in Georgia or to at least minimize your exposure to Estate Recovery. Since Medicaid rules are constantly changing, you will need assistance from someone knowledgeable about these rules.