Will we have to repay Medicaid one day?
My mother had an enormous hemorrhagic stroke 13 years ago losing all physical abilities. She lived for 4 years in a nursing home and died 9 years ago. She had health insurance, Medicare, and long term care insurance, all of which were quickly exhausted at her level of care. In less than a year she was qualified for Medicaid. My dad had to sell one car and cash in a life insurance policy to make her eligible. Her social security check went directly to the cost of her care. I'm now my dad's POA and the executor of his will. I've just heard that one day when it's time to sell his house (this assumes he lives there until his death, which is in doubt) I'll be responsible to repay Medicaid for the cost of my mothers care from the proceeds of the house sale. Wondering if this is correct?
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If yes, once Dad leaves the house, Medicaid will want 50% of the equity to help pay for Mom's care..... now if Dad has to use Medicaid for his care, then his 50% would be self-pay until the equity is used completely.
Please verify this with the State Medicaid office as each State has their own rules and programs. Pay back is usually common across the board.
Why? Well couple of reasons:
- the MERP / estate recovery requirement would have been fixed at to the date your state passed the laws or adminstrative code as to the acceptance of DRA 2005 / Deficit Reduction Act. DRA was Bush2 era legislation but states took anywhere from a year to 5 years to enact. DRA kinda reset Medicaid to make it more uniform as to federal / state coordination...... It now REQUIRES estate recovery to be attempted. If mom went onto Medicaid before DRA done in their state, she'd be outside of recovery rules.
- and what her age was is important as for under age 55 Medicaid, there is no estate recovery mandate. If she was younger (like 54) when stroke hit & went on SSDI or SSI (so got perhaps Medicare early or Medicaid), she could fall into this loop hole.
If either was moms situation, then dads home should not be an issue for MERP unless he himself applies for Medicaid. Although dad may need an atty to send a tersely worded letter to either the state or the outside contractor for MERP.
Now if neither above is dads situation, then his state laws for property rights & probate will matter as to how & if recovery is done. Some states totally exclude the surviving spouse from any recovery. Sometimes the surviving spouse opens probate on late spouse to get any lein or claim resolved in probate so that the medicaid tally cannot linger as a "cloud" on the title. Some states property laws are such that a lien cannot be placed on the property but instead is a claim against the estate (of either your mom or your dad). You as dads Dpoa will need to discuss with an elder law atty as just what dads situation is as it is for his states laws.
Really it would be a great idea to schedule an elder law atty meeting for dad sooner rather than later. Now before the visit, pull the chain of paperwork on house; find his will and moms will. Most county courthouses have property paperwork as a lowcost download (like $8.00 for warranty deed). Find dads old tax bill as the PPIN will be on it to do the search online. If you find you need to do a courthouse run, take old tax bill, cash & go about 9:30/10 as court in session & courthouse staff will happily get you the whatever's. Also do a "face sheet" on dad, it has all his info like DOB, marriages, divorces, kids (even if deceased), and brief outline of his assets (real property, life insurance & EOY 2016 income summary). Face sheet a page or page & 1/2 at most. Try to do this over the summer so that if something legal needs to be done it can start & be resolved before 2018. Also ask atty. if the current DPOA is totally ok for doing any & all financial for dad. If he decides to sell house & you'll be handling all, it needs to reads to allow for this. Also if you find that you will likely need to front costs on the house to sell it, you may want to get some sort of memo of understanding or promissory note done for those costs to be repaid from house sale proceeds otherwise dad cannot reinburse you without medicaid gifting issues. Really a good elder law atty (like one NAELA) will know what needs to be done. Good luck.