The Aging & Disabilities Unit receives many calls from individuals and their families members about the effect that entering a nursing home has on the individual’s home ownership. In the community rumors abound that in order to enter a nursing home and to have Medicaid pay for it, you will have to give your home to the state.
These rumors are wrong. If someone owns a home and requires long-term skilled nursing home care to be paid for by Medicaid, she can preserve her home ownership for the entirety of her life. This is true only for homes that the potential nursing home resident actually lives in, and not for non-residential property that an individual owns. When evaluating financial eligibility for a Medicaid nursing home grant, the Pennsylvania Department of Public Welfare (DPW) will always exclude as a resource a home that the applicant lives in. Again, to have Medicaid pay for long-term, skilled nursing care, an appplicant NEVER gives up the ownership of her home.
Unfortunately, these rumors can cause individuals to take steps that will ultimately affect a person’s eligibility for Medicaid to pay for a nursing home stay. Sometimes, a home-owner will transfer their home to a family member thinking that this will protect their home from the state. When this is done, it actually can prevent an individual from receiving Medicaid, unless they receive actual payment of fair market value for their home. When an applicant applies for Medicaid, DPW will do an in depth review of an applicant’s financial history from the previous five years. If DPW discovers that an applicant has transferred a home for less than fair market value, it will penalize the applicant by denying her Medicaid for a period of time. If a homeowner anticipates a stay in a nursing home facility, she should contact an attorney before transacting any business regarding the ownership of her home.
The rumors of losing one’s home, we believe, have their origin in Pennsylvania’s Estate Recovery Program (ERP). ERP is a program mandated by the federal government that requires all states to seek recovery from the estate of a deceased person the cost of long term nursing care paid for by Medicaid. This law is only applicable to Medicaid recipients over 55 y.o. Additionally, this law only takes effect after the person receiving nursing care has passed away.
Because Medicaid is a program for low-income individuals, often the only asset left in a person’s estate is the home. Upon the death of the Medicaid recipient, DPW will send a letter to the family asking for an accounting of the deceased’s estate. This will be followed by a claim from DPW for the cost of care provided while the individual was receiving a Medicaid grant.
However, there are many ways to avoid having to subject a home to estate recovery. The law requires that DPW grant hardship waivers in certain circumstances (spouses, disabled children, care-givers who provided significant care prior to the entry of deceased into a nursing home). CLS often works with family members to get these waivers.
Because of the rampant rumors about ERP, many people will not apply for Medicaid, and in turn, not receive the necessary medical care they require. Individuals who need long-term, skilled-nursing care should know:
1) You do not have to give up ownership of your home in order to receive a Medicaid grant for long-term skilled nursing care.
2) Recovery from the individual’s estate after they decease is not inevitable, and many times avoidable.