Family warns others that Medicaid can take your house

Social Security and Medicare don’t cover long-term care in a nursing home and most of it is paid for out of pocket by families. If a persons qualifies for Medicaid to pay for such care, there are substantial financial consequences.

Per a television news report:

A Kansas family is warning others that Medicaid can take your house.

It’s a lesson learned the hard way after a grandmother battled cancer and spent her final years in a nursing home.

“People need to know they are going to do this. People need to know they can take away your homes if they help your parents,” Janie Lucas warns. . .

“When someone goes on Medicaid, they are notified that at some point estate recovery is going to be a part of this process. Unfortunately, they are inundated with so much paperwork it probably doesn’t even get noticed,” elder car attorney Tim Winkler said.

Winkler points out every day 9,000 baby boomers turn 65, but many families are unprepared.

Medicaid is very clear about this:

States may also impose liens on real property during the lifetime of a Medicaid enrollee who is permanently institutionalized, except when one of the following individuals resides in the home: the spouse, child under age 21, blind or disabled child of any age, or sibling who has an equity interest in the home.

And it is worse than this family knows. Medicaid place a lien on the house even if the family member didn’t go to the nursing home.

Under a 1993 federal statute, states must recover money spent on behalf of individuals who were age 55 or older when they received Medicaid specifically for nursing facility services, but also home- and community-based services provided under a Medicaid waiver, and related hospital and prescription drug servicesAccordingly for the Medicaid programs discussed in the article, state law still requires estate recovery; Medicaid will be reimbursed.

TO SUMMARIZE: the Alabama Medicaid Agency has elected to seek estate recovery for all Medicaid costs for all Medicaid beneficiaries for services received after age 55 including the estates of individuals who never received Medicaid nursing home benefits pursuant to 42 U.S.C. § 1396p(b)(1)(B)(1)(ii).

Long-term care is possibly the most critical threat to a family’s long-term financial well-being. Many plan for retirement and even heavily invest in life insurance; however, the possibility of the need for a nursing home or even assisted living is completely overlooked. See here:

Long-term care expenses are running more than double the rate of inflation. A decent nursing home costs more than $100,000 a year.

Assisted living and home care are less expensive, but are not covered by Medicaid, which only kicks in if you’ve spent down most of your nest egg.

Long-term care is highly fragmented in this country, but there’s almost no public funding for it. Veterans can obtain some help and it really helps if you have a guaranteed pension.

Many expect Medicare to pay for long-term care, but it does not except in a very narrow set of circumstances and then only for up to 100 days.

The Genworth Cost of Care Survey for 2017 found the following median costs for long-term care in Alabama:

  • Homemaker Services: $106 per day
  • Adult Day Health Care: $26 per day
  • Assisted Living Facilty with Private Bedroom: $36,684 per year
  • Nursing Home, Semi-private room: $73,000 per year
  • Nursing Home, Private room: $77,563 per year

Can your family cover these costs for 2, 3, 5 years? The average stay in a nursing home is 835 days, according to the National Care Planning Council. A separate statistic provided by the National Investment Center (NIC) in their 2010 Investment Guide cited the average length of stay in assisted living as 29 months.

What is your family’s game plan? What contingency planning needs to be performed? What happens in the case of dementia, debilitating conditions or Alzheimer’s? What happens when the elder spouse can no longer physically maneuver their husband around the house safely?

There are options: personal service contracts, life estate deeds, etc.