The short answer is YES, you can keep the Government from taking your home if you require nursing home care paid for by the federal Medicaid program. The Medicaid Estate Recovery program was was created by a requirement in the Omnibus Budget Reconciliation Act of 1993 (OBRA ‘93). The provision required that states seek to recover the costs of seniors’ medical care from their estates after they died.
Georgia did not move quickly to obey the federal mandate for Medicaid Estate Recovery, but on July 14, 2004, the Georgia Department of Community Health (DCH), changed Georgia policy and implemented the estate recovery program in Georgia. It was not until 2006, that they actually began to enforce it.
In Georgia, Medicaid estate recovery applies to anyone who was a Medicaid recipient and who at the time of death was an inpatient in a nursing facility, intermediate care facility for the mentally retarded or other mental institution. It also applies to those who at the time of death were over the age of fifty-five (55) and were receiving home and community based services.
The definition of an estate is “all real and personal property under the probate code.” According to DCH, the estate also includes real property passing by joint tenancy, right of survivorship, life estate, survivorship, trust, annuity, homestead or any other arrangement. The estate additionally includes excess funds from a burial trust or contract, promissory notes, cash and personal property. The Georgia rules are not compliant with federal law and we do not agree with DCH’s position on this, but there have been no court cases to settle the dispute yet.
The first thing to know is that no action to recover assets (including homes or property) will be taken while a Medicaid recipient, a spouse or qualified children (disabled children) are living in the home and estates valued under $25,000 will not be subject to recovery (see A Snapshot of Georgia Estate Recovery). So, if you are a Medicaid recipient and either you or your spouse are still living in the home estate recovery will take no action. For a married couple where the husband receives Nursing Home care during his lifetime and then dies, as long as the spouse continues to live in the home, Medicaid estate recovery cannot take any action with respect to that house or other assets.
We recently had a client whose husband was living in a nursing home. The wife owned the home jointly with her husband. She was suffering from cancer and wanted to sell her home and move into a new home with her daughter. Because she was living in the home, it was exempt and the transfer from her husband to her was an exempt transfer. This allowed her to sell the home and she and her daughter bought a new larger home where they could live together and the daughter can help take care of her sick mother. When our client dies, the home she bought with her daughter will not be subject to Medicaid estate recovery.
The second thing to know is that there are ways to protect your assets from estate recovery even though you may be a Medicaid recipient who would ordinarily be subject to the rules. In cases where we are planning in advance of the need for Medicaid eligibility, we can a special type of trust called a Medicaid Asset Protection Trust to protect the assets inside the trust from the Georgia Estate Recovery Program. There are also some transfers of assets to family members that are exempt and would protect those assets from estate recovery. Last, it is possible to transfer the home to the well spouse which allows the well spouse to continue to live in the home or sell it as needed. The important thing to remember is that you should not be afraid to apply for Medicaid simply because you are concerned about losing your home. If you work with a qualified elder law attorney, you can protect your assets and receive the benefits you need to help pay for medical care.