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Home » Elder Law » Can I Keep My House When I Apply for Medicaid?

Can I Keep My House When I Apply for Medicaid?

May 6, 2014 by John Potter

The Medicaid program is relevant to many senior citizens. While most people are going to qualify for Medicare coverage initially, Medicaid enters the picture because Medicare will not pay for long-term care. If you need help with your day-to-day needs, the care is considered to be custodial care rather than medical or convalescent care. Custodial care is not covered by Medicare.

A very significant percentage of seniors do eventually need help with their activities of daily living. According to the United States Department of Health and Human Services, 70 percent of people who are turning 65 will eventually need long-term care. Living assistance is very expensive, and most people cannot easily absorb these costs out-of-pocket.

Need-Based Program

Medicaid is a program that is available to people who can demonstrate significant financial need. As a result, Medicaid planning is typically going to involve a Medicaid spend down. The term is more or less self-explanatory: you spend down or divest yourself of assets before you apply for Medicaid coverage.

Most states have an asset limit of $2000 for a single individual, but everything that you own is not considered to be countable. You can retain ownership of one vehicle, a life insurance policy valued at up to $1500 (the rules are slightly different in North Carolina), your wedding rings and heirloom jewelry, and your personal effects. It is also possible to retain up to $1500 for funeral or cremation expenses.

In addition to the above, your home may not considered to be a countable asset, but there is an upper equity limit. We have offices in Kentucky and North Carolina. The upper home equity limit in 2014 in these two states is $543,000.

If you are married and your spouse is going to remain at home, there is no upper equity limit at all.

Even if your home does not count when Medicaid is evaluating your financial profile, the program can seek reimbursement from the  assets that comprise your estate. As a result, your home could potentially be targeted after you pass away when Medicaid is seeking recovery. If you take the right steps in advance, you can make sure that you keep your home in the family.

Medicaid Planning Consultation

If you are concerned about potential long-term care costs, you should discuss Medicaid planning with a licensed elder law attorney. There is a lot to take into consideration, and the program rules are complex.

There is a five year look back period for gifts so the proper type of planning depends on whether you are planning at least five years prior to applying for Medicaid.

We would be glad to assist you if you would like to put a plan in place. You can request an appointment through the contact page on this website.

 

 

 

 

 

 

 

  • Author
  • Recent Posts
John Potter
Latest posts by John Potter (see all)
  • What You Need to Know about the Medicaid Look-Back Rule - January 3, 2023
  • How to Pass Down Your Legacy in Your Estate Plan - October 3, 2022
  • Practical Steps to Take after Receiving a Terminal Diagnosis - September 30, 2022

Filed Under: Elder Law Tagged With: Medicaid Planning

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Overall The Potter Firm was very professional. They took what could of been a very complicated process and were able to break it down so it was a lot easier to understand. We are confident we now have made the right decisions in our estate planning. Good firm to work with.

DKS & KMS Client Review August 28, 2020

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John Potter has been a real pleasure to work with. He is very knowledgeable and explains things in a very simplistic manner so the average person can understand how/why the laws are written. He is very attentive and asks questions in such a way that not only helps him understand your goals, but also helps you think about what type of goals and expectations you should be considering. Exemplary client service.

David J. Client Review August 28, 2020

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My husband and I selected Ms. Potter to assist with our small business. She responsive and attentive every time I have a question or need assistance, and is extremely knowledgeable and able to answer any legal question I have had. I know I can count on Ms. Potter for all of my business legal needs and I would highly recommend her to anyone needing legal assistance with such.

Jillian Client Review August 28, 2020

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