Medicaid, for many people, is the only long-term health care insurance available. If your elderly parent needs to go to a nursing home, unless he or she has substantial assets, your parent (or you) will most likely have to deal with your state's Medicaid agency to apply for financial assistance for the nursing home. This article covers the costs of nursing home care, what resources must be utilized by the elderly person to pay those costs, and what may be exempt so that costs don't completely impoverish your parent or other family members. You want to ensure your elderly parent receives the much-needed care that Medicaid can pay for while at the same time preserving property your parents have spent a lifetime to acquire. You will learn about how to preserve your parent's property while getting the care your aged parent needs.
Many people will try to keep their parents out of a nursing home for lots of reasons. One of the big reasons is the cost. Nursing home care is expensive. Expect to pay from $35,000.00 to $150.000.00 per year. Actual costs depend on several factors including the level of care provided and location. Typically it costs more in the northeast and in California than other locations. The average length of stay in a nursing home is around 2 翻 years or 30 months. The general rule is that before Medicaid will pay, your parent must spend all of his or her money except for the last $2,000.00.
Often times family members hope Medicaid will pay for their parent's health care costs but do not want Medicaid to take all their parent's money and property to pay for it. Some family members transfer property out of their parent's name into the name of another person so that Medicaid will not be able to take the property. Unfortunately Medicaid has a rule that says they can look at any property that your elderly parent owned for the last 5 years and take the property from the new owner to pay for nursing home costs. This is called the "5 year look-back period." People do not plan 5 years in advance for a parent's nursing home stay, so transferring property out of your parent's name will not work to keep Medicare from taking the property.
In many cases the family home is not something that Medicaid will take if the other spouse continues to live in the family home. In the case of a widow Medicaid still won't take the family home if the nursing home resident has the subjective intent to return home even if there may be no realistic possibility to return home. Often times all it takes to establish the subjective intent to return home is for your elderly parent to sign an affidavit stating that he or she intends to return home upon regaining good health. This preserves the house while your parent lives in the nursing home, but after your parent's death Medicaid can take the house to recover costs unless steps have been taken to avoid it.
Often times a simple strategy can be used to keep Medicaid from taking your widowed parent's home after he or she dies. That strategy is known as a life estate. It is simple to do. In addition to the affidavit of subjective intent to return home, your parent needs to sign a new deed to his or her house. This new deed gives the house to the beneficiary upon your parent's death while your parent retains ownership of the house during his or her lifetime. After the death of the parent, if the beneficiary acts quickly to complete the transfer of the title of the house from the parent to the beneficiary, Medicaid will usually not take the house. That is because Medicaid usually only intervenes in a probate to take the house, and the technique described above avoids probate.
This strategy avoids the problem of the 5 year look back period because your parent keeps the house during his or her lifetime so no transfer occurred. Then it avoids Medicaid using the house to pay for your parent's nursing home costs after your parent dies because there is no probate estate for Medicaid to file a claim against.
Since Medicaid is run be each state, the rules vary. This can get complicated very fast. Therefore you should not use this information as legal advice but should seek the advice of a lawyer who has experience in these matters.
To sum up you read about the possibility of your parent needing nursing home care, the costs of that care, and how long your parent may need that care. You also read that care is paid for by your parent and then by Medicaid. Finally you learned how to possibly keep Medicaid from taking the family home to pay for your parent's care.
This is a very complex area, and many different strategies are available to keep Medicare from taking family property. If you are facing the possibility of nursing home care for a parent and your parent owns a home or other substantial assets, it would be wise to seek the advice of an attorney who handles these matters to preserve family property.
Copyright 2011 Jeffrey B. Kent. You may reuse this article only if you use it unedited in its entirety and you provide a link back to my website.
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