Medicaid generally does not "take" a house while you are alive, but through Estate Recovery, they can place liens on it or force its sale after your death to repay long-term care costs. Exemptions often apply if a spouse, minor child, or disabled child lives there. Planning with an attorney is recommended to protect assets.
The best way to save your house from Medicaid recovery is to put it into an irrevocable trust. A trust protects the home because the individual no longer owns it.
There are also many assets that Medicaid considers to be exempt (non-countable). Exemptions include personal belongings, household furnishings, an automobile, and generally one's primary home. In Florida, IRAs in payout status are exempt.
Yes, you often have to pay back Medicaid, primarily through the Medicaid Estate Recovery Program (MERP), which allows states to recover costs for long-term care (nursing home, home-based services) and other services from the estates of deceased recipients (age 55+). You might also have to repay if you received benefits when ineligible, got a personal injury settlement, or inherited assets, but recovery from the estate is waived if a spouse, child under 21, or blind/disabled child survives you, or in cases of undue hardship, with state-specific rules applying.
Upon one's death, the state will file a claim against their estate, including one's home, to collect funds for repayment of nursing home care expenses. Not all states use liens as a means of reimbursement for Medicaid funded long-term care. While Estate Recovery is required by all states, liens are not.
The short answer is: You don't have to sell your home to qualify for Medicaid in Florida, as it's generally exempt so long as you meet specific criteria. However, there are a number of caveats that affect this exemption, which Florida Medicaid applicants should be aware of.
How to Shield Your Home from Medicaid Recovery
State Medicaid agencies operate electronic asset verification systems (AVSs) that collect information directly from financial institutions to determine whether certain seniors and people with disabilities who are applying for or receiving Medicaid have assets below eligibility caps.
Transferring assets into an irrevocable Medicaid Asset Protection Trust is a powerful way to shield them from Medicaid calculations. Once assets are in the trust, they're no longer counted as part of our loved one's estate. And after their passing, the assets may be distributed to beneficiaries.
If you already have some legal experience, you might see how an asset protection trust is excellent for protecting assets from litigation and creditors. By removing ownership of the valuable assets in question away from you and your immediate family members, you make those assets practically untouchable…
Once your home is in the trust, it's no longer considered part of your personal assets, thereby protecting it from being used to pay for nursing home care. However, this must be done in compliance with Medicaid's look-back period, typically 5 years before applying for Medicaid benefits.
Starting January 1, 2024, the asset test to qualify for a Medicare Savings Program was eliminated. This means individuals can have any amount of assets and still qualify for a Medicare Savings Program.
Public records: Property sales are a matter of public record, which Medicaid can access to verify changes in your assets. Financial disclosures: When you renew your Medicaid coverage (generally every 12 months), you're required to disclose your financial situation, including any real estate transactions.
While Medicaid cannot attempt Estate Recovery if there is a surviving spouse, some states will attempt to collect after the death of the surviving spouse, while other states will not. California and Texas are two states that prohibit Estate Recovery after the death of the non-Medicaid spouse.
To minimize the impact of Medicaid estate recovery, consider strategies such as:
No, Medicare won't take your house, but if you use Medicaid for long-term nursing home care and run out of assets, the state can place a lien on your home and recover costs from it after you die through Medicaid Estate Recovery (MERP). Your home is generally protected while you're alive if a spouse, minor child, or disabled child lives there, but without planning, it can be sold to repay the state for care costs once you pass away.
According to federal and state law, the money that the Florida Medicaid program pays on behalf of a Medicaid recipient is a debt owed back to the state. Upon the death of the Medicaid recipient, the Medicaid program files a claim against the decedent's estate in order to seek reimbursement for the amount owed.