If you are planning a move into a long-term care facility, you may wonder what you should do with your home. Can you sell it? If you do, how will it affect your benefits?
If you’re one of the many older Americans asking yourself, “If I sell my house, will I lose my Medicaid?” this article will help. Here’s what you need to know about Medicaid and the proceeds of a home sale.
Understanding Medicaid Pay in a Nursing Home
If you have moved to Medicaid pay in your long-term care facility — or you will be doing so soon — Medicaid will pay 100% of your nursing home costs at a Medicaid-approved care facility. In order to qualify for Medicaid pay, your income and financial assets are carefully analyzed.
Part of accepting Medicaid pay for a nursing home is the understanding that all of your assets will go toward your care. If you come into a significant amount of money, you’ll no longer qualify for Medicaid payments until that money is used up.
This includes selling your home. While you own your home, it doesn’t count toward your income. However, when you sell it, your income and asset status changes.
Selling Your Home
Selling a home with a professional seller’s agent can help you financially, but it will also move you back into the private pay tier at your care facility. Once your assets are exhausted and you qualify again, you can return to the Medicaid pay system.
If you want to stay under the Medicaid pay system, you may decide to let your heirs sell your home after you pass away. Even then the proceeds will go to Medicaid as reimbursement for what the state put toward your care before your heirs receive anything.
In that case, does it matter? Actually, it does. The Medicaid rate for a care facility is lower than the private pay rate, so you’re technically saving money for each month you stay on the Medicaid system.
The primary difference in deciding when to sell your home is the expense and difficulty of the upkeep. If you or someone you love is spending significant money and time taking care of the home, it may make sense to sell. If not, or if the home is helping your loved ones have a place to live, it’s worthwhile to keep it.
Giving Away Your Home or Assets
State Medicaid programs are very focused on making sure that the patient’s care that they pay for is actually needed. This means that they don’t allow you to shelter assets by giving them away.
For instance, you might think you could simply give away your home, or sell it for $1 to your family members or children. Medicaid has a five-year look back rule. Once you qualify for Medicaid, the program looks back to see if you’ve sold, given away, or gotten rid of during the previous five years. If it finds assets, the program will go after them to pay for your care.
This means you cannot donate your home or sell it for less than its value to avoid giving the proceeds to Medicaid. Instead, visit with a professional such as an elder care attorney to get advice about the best way to move forward.
Where to Get Advice About a Home Sale
It’s best to consult with an elder law attorney before you make a final decision about how to handle your home. You may decide to include your heirs in your decision, or you can decide based on your own personal judgment.
Many times it makes the most sense to hold onto a house while you are on Medicaid pay at a care facility. When you pass away, your heirs can either sell the home and use the proceeds to repay Medicaid, or keep the home and make the repayment themselves.
Of course, if you live a long time and your home isn’t worth much, it may make more sense to sell it now. In that case, you’ll want to work with a professional local seller’s agent, such as a Clever Partner Agent. These agents work on a low flat-fee commission or 1% if the home sells over $350,000, so you can maximize your profit.
Either way, the priority is that you get the care you need at a price you can afford. That decision is yours alone.