When you sell your home. You will be way above the asset limit. (Home is not considered an asset until you die). The money from the sale of a home is considered an asset and you will lose your Medicaid because you have the extra cash. (Unless you have ``some'' terminal illness).
Selling your home will not cause you to lose your Medicare benefits. However, if you have a Medicare plan and move to a new address, you may need to change your plan. Original Medicare includes Parts A and B.
If you inherit money and do not report it, you will be required to pay Medicaid back for the services and benefits that were provided during any period you would have otherwise been ineligible. When a Medicaid recipient receives an inheritance, it is counted as income in the month that it is received.
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.
There are also two state exceptions when it comes to the Look-Back Period – California and New York. There is no Look-Back Period for HCBS Waivers in California, and it's 30 months (2.5 years) for Nursing Home Medicaid, although that will be phased out by July 2026, leaving California with no Look-Back Period.
Special needs trusts help you to manage inheritance money so it won't count toward income-based benefits like Medicaid and Supplemental Security Income (SSI). The money in special needs trusts must pay for expenses your government benefits don't cover.
Learn more about MERP. California eliminated their asset limit effective 1/1/24. While this means one's home is automatically safe from Medicaid while they are living, the home is not necessarily safe from Medicaid's Estate Recovery Program.
It can be considered property and needs to meet spent down requirements. Eff July, 2022 property limit for 1 person is 130,000 in California for MediCal recipients.
Medicare eligibility is based on age, illness and/or disability status rather than income. Inheriting money or receiving any other windfall, such as a lottery payout, does not bar you in any way from receiving Medicare benefits.
You Will Not Lose Your Benefits by Selling Your Home
Therefore, selling a home while retired can not render you ineligible for benefits, although it could expose a larger portion of your benefits to federal and/or state income taxes.
People representing Medicare plans aren't allowed to:
Come to your home uninvited to sell or endorse anything. Call you unless you're already a member of the plan or you've given them permission to contact you.
If a parent has become incapacitated, he or she needs to have identified – through a power of attorney – someone who can act on their behalf, for the sale to take place. If the caregiver has no legal authority, then the caregiver has absolutely no right to sell the home.
You won't lose your Medicare benefits from selling your home. But, if you move to a new address, you may need to change your supplemental Medicare plan.
If your state Medicaid office tells you that your income is too high for Medicaid, ask them if there is a spend-down option. If there is, your state may have a separate application. Check with your local office on documents you'll need, and whether you can apply online or in person.
However, an attorney may be able to help you set up a trust or another vehicle for your settlement to minimize the impact it has. For example, a special needs trust or a Medicaid asset protection trust (MAPT) may shelter the funds from counting as income.
For instance, in California, the Income Eligibility Verification System (IEVS) is an electronic database that matches the income information provided by the applicant to other databases to verify it is accurate.
While one's home is generally exempt from Medicaid's asset limit, the proceeds from selling one's home, in most cases, is not exempt; it will be counted towards Medicaid's asset limit. This, more likely than not, will disqualify one from Medicaid due to having “excess” assets.
It's possible that Medicaid can take your house through estate recovery if you were 55+ years of age and received Medicaid-covered long-term care services. There are exceptions to the estate recovery rule, which also may vary by state.
California stands apart from the other states. In CA, Medicaid (Medi-Cal) recipients can gift inheritance, which is considered “income”, the month in which it is received. Furthermore, Medi-Cal recipients have no asset limit, and therefore, can have unlimited assets and still be eligible for long-term care benefits.
If your total savings (including the inheritance) exceed certain thresholds, you may lose eligibility for means-tested benefits.
An inheritance will not affect Part A. Most beneficiaries are eligible for premium-free Part A coverage due to the taxes they paid while working. The only way you'd have a premium is if you or your spouse haven't worked at least 40 quarters.
Once you've been approved for Medicaid coverage, you take on some of the responsibility of maintaining your eligibility and reporting anything that impacts it. Medicaid agencies make annual checks to account balances to ensure the Medicaid recipient still meets the right requirements.
Each state's Medicaid program uses slightly different eligibility guidelines, but most examine all a person's financial transactions dating back five years (60 months) from the date of their qualifying application for long-term care benefits. (In California, this window is only 30 months.)