In my community, there is a household with only an older grandmother and her 18 year old granddaughter. The grandmother has been in the nursing home for about a year and the granddaughter has been told that their home must be sold to pay for nursing home expenses.
I've googled on this issue and I'm not sure if this advice is correct. This family has no other assets/incomes except for their house and I thought that the value of the house was exempt from the $2,000 asset maximum for Illinois Medicaid.
Does anyone have any links/advice for this situation?
Note - I'm not sure if the grandmother is actually on Medicaid yet or not. If the grandmother is on Medicaid, it could be that the nursing home is charging a rate higher than allowable and is trying to collect the difference by selling the house. Or it could be that the nursing home has certified that the grandmother will not be able to return to independent living?
For TX Medicaid, the home is always an exempt asset. The home does not have to be sold in order for the elder to apply or stay on Medicaid either. The home can remain an exempt asset for their lifetime. Now although that sounds just terrific there are some issues:
1. Upon the elders death the home becomes an nonexempt asset and subject to possible recovery under MERP - Medicaid Estate Recovery Program. Now MERP has exemptions, exclusions and hardships which family can file. But it is totally up to family to do so and with the documentation required and submit all in a very very time sensitive framework. Your state's Medicaid site should have the details on MERP and how it runs for your state.
Like for TX if granddaughter is low income and she is the one inheriting the house under gran's will, then she would qualify for a low-income heir exemption. But if her mom inherits the house, then that exemption is out.
2. Once gran is on Medicaid, she is expected to do a co-pay or her "SOC" (share of cost in Medicaid speak) to the NH of all her monthly income to the NH except for a small personal needs allowance (35 - 90) which is just enough to pay for grans hair salon, phone or cable bill at the NH. Gran will have no - nada - zero of her money to pay for anything on her home for the rest of her lifetime. She can keep the house but someone else will have to pay for taxes, insurance, utilities, yard, maintenance, etc on the house from now till grannie dies. If there is still a mortgage on the home, that too someone will have to pay and without their getting any benefit of the credit history for the payments. If the house needs a new roof, then someone other than grannie will have to pay for it. For most families, having & paying for grannie's house just isn;t feasible and so the house is sold. With the proceeds from the sale of the home going to pay for grannies care & stay @ the NH. Family does not get to keep any of the money either.
But if you can afford everything on the house and there are reasons why the house should continue to be owned by grannie that make sense to you, then keeping the house can happen as TX rules are done. If you decide to go this route, then imho you kinda need to be prepared to do this for however long grannie is around whether it's 6 months or 6 years.
Really you need to see what your state allows for.Good luck.