Medicaid, Long-Term Care and Your Home
You may be aware of the fact that the Medicaid program is a health insurance safety net for people with very limited financial resources. The limit on countable assets is just $2000 for an individual. If you have never been financially needy, you have probably gone through life with the understanding that Medicaid will probably never be relevant to you.
This makes complete sense on the surface, because just about all working people eventually qualify for Medicare. It would be logical to assume that Medicare is set up to pay for health-related expenses that seniors would typically face.
To some, it is hard to understand, but the fact is that Medicare does not pay for a very significant health-related expense that will impact most senior citizens. The Medicare program will not pay for long-term care. If you need help with your activities of daily living at home, in a nursing home, or in an assisted living community, you are on your own.
This gap is a very big deal, because long-term care is extremely expensive. Medicaid does pay for long-term care, and this is why it should be on your radar if you are looking ahead toward your senior years.
Medicaid Regulations and Your Home
We previously touched upon the fact that there is a $2000 limit on countable assets for Medicaid eligibility purposes. “Countable” is an operative word, because everything that you own is not counted, including the possession that is probably your most valuable one.
The Medicaid program does not count your home when your eligibility status is being determined. There is however an equity limit. Since Medicaid is jointly administered by the federal government along with each state government, the individual states have some latitude with regard to the way that they choose to administer the program. We practice law in Texas, and in our state, the limit on home equity in 2015 is $552,000.
When it comes countable assets, people often give assets to their loved ones before they apply for Medicaid. However, the gift giving has to be completed at least five years before you submit your application. If this rule is not adhered to, your eligibility would be delayed, and you would have to pay out-of-pocket during the penalty period.
You may not be concerned about giving away your home, since it is not a countable asset. However, there is a cause for concern, because Medicaid is required to seek reimbursement from your estate after you are gone. If your home is part of your estate, it could be subject to a Medicaid lien.
To keep the home in the family, you could give it to a loved one, but you should be mindful of the five-year look-back.
Medicaid Planning Consultation
If these facts have gotten your attention, our firm can help you prepare for the future. To set up a free Medicaid planning consultation, send us a message through this page: Dallas TX Elder Law Attorneys.