Title: Can Medicare Take Your Home After Death?
When a senior passes away, their house may become a focal point around which family dynamics and financial planning revolve. Often, there is a debate among beneficiaries and legal advisors about whether Medicare, the federal healthcare program for the elderly, can reclaim the house as part of Medicaid's asset recovery process posthumously. This article aims to clarify the rights and responsibilities of heirs and beneficiaries under the Medicaid Estate Recovery Program (MERP).
The Basics of Medicaid
Medicaid is a joint effort of the federal and state governments designed to provide medical coverage to low-income individuals, including the elderly and the disabled. The program is funded through the states, and each state has its unique set of rules and regulations to determine who is eligible and what services they receive.
To be eligible for Medicaid, an individual must meet specific financial requirements, such as having less than a certain amount in countable resources ($2,000 in most states). One potential asset that is often not counted when determining an individual's Medicaid eligibility is the homestead, which can be kept if certain conditions are met.
The Role of HEART
HEART (Historic Assessment and Rapid Transitions) is a pilot program created by the Centers for Medicare & Medicaid Services (CMS) to help streamline the process of asset recovery for eligible Medicaid applicants. HEART focuses on individuals over the age of 65 who may have been receiving Long-Term Services and Support (LTSS) through Medicaid prior to their death. States with HEART can conduct asset reviews and recoupment activities without the need for court approval as long as the individual was eligible for Medicaid and continued to meet the program criteria throughout their lifetime.
However, despite these advancements, HEART does not alter the legal rights of heirs and beneficiaries under Medicaid. The state can still pursue asset recovery through the probate process if the deceased held title as joint owner or in trust for their benefit.
Merlin's Law and Its Implications
One of the most significant legal advancements for Medicaid asset recovery is Merlin's Law, passed by Congress in 2014. This law clarified that Medicaid may seek Recovery of certain long-term care services costs from the estate of a Medicaid recipient where the individual had a child under the age of 21 who was disabled, blind, or an individual with a disability and who resided in the home continuously for one year before the death of the individual. This change in the law meant that a state could now reach into an estate that might have otherwise been protected under traditional Medicaid asset recovery rules, such as a home owned solely by a spouse.
The Case of Single Beneficiaries
When an individual who owns a home is single and moves into a nursing home, they may lose their exemption if their equity interest exceeds Medicaid’s asset limit. For example, in 2024, the equity interest limit is $713,000 in most states. If the individual’s equity interest is over this limit and there are no other assets to cover their nursing home expenses, they may need to liquidate their home to pay for their care. This can lead to the loss of their home and the subsequent need for the Medicaid recipient to apply for Medicaid again.
The Role of Spouses
The situation can vary significantly for married couples. If only one spouse is eligible for Medicaid, and they pass away prior to the other spouse, the state may attempt to recover the costs of care for which they paid through a home sale. However, if the surviving spouse is able to keep the home, either through joint ownership or by being designated as the beneficiary of an Irrevocable Trust or a Long-Term Care Partnership Policy, the home may be protected from Medicaid estate recovery.
After the死亡 of a married couple
When both spouses are eligible for Medicaid, the state may attempt to recover funds from the sale of one spouse's home if it is the only asset available to pay for their care. However, there are exceptions, such as the Caregiver Exemption, which allows a parent to transfer their home to a healthy adult child without violating Medicaid’s Look-Back Period and creating a penalty period of Medicaid ineligibility. Additionally, if the couple had a disabled, blind, or minor child, Estate Recovery could be prohibited.
Estate planning andasset protection
The bottom line is that Medicaid asset recovery can be a complex and nuanced process. Effective asset protection planning, including the creation of trusts and the execution of advance directives, can help ensure that a family's home is protected and that their loved ones are adequately cared for financially, regardless of health challenges.
Planning with a qualified Medicaid Planning Professional who can navigate the complexities of Medicaid estate recovery rules in your state is essential. It's important to review your specific financial situation and discuss your family's needs and goals with a professional advisor to develop a comprehensive plan that meets everyone's needs and preserves assets if necessary. Remember, asset protection planning is an ongoing process that should be regularly reviewed and updated as life circumstances change and new laws are enacted.
