Can Medicaid Take Your House? Understanding the Rules and Protecting Your Home

When it comes to Medicaid and homeownership, many people worry about possibly losing their homes due to medical expenses or long-term care costs.

In this article, we’ll explore whether Medicaid can take your house, discuss scenarios when it might happen, and provide practical steps to safeguard your home.


Can Medicaid take your house?

The short answer is no, as long as you or your spouse are living in the home. However, there are important nuances to consider. Let’s delve into the details.

Medicaid Estate Recovery Programs (MERP)

All 50 states and the District of Columbia have MERPs. These programs aim to recover long-term care costs paid by the state after the death of a Medicaid recipient.

The remaining estate is used for reimbursement. However, if the deceased has a surviving spouse, a minor child under 21, or a disabled/blind child of any age, Medicaid cannot attempt estate recovery.

Most states have a limited timeframe for filing estate recovery claims, usually within one year after the recipient’s death.

Home Equity Exemption

Medicaid generally cannot take your home if you live in it and your home equity interest is under a specified value.

In most states, the home is exempt and not counted toward Medicaid’s asset limit (usually $2,000). Home equity is calculated as the home’s value minus any debt against it.

Scenarios When Medicaid Can Potentially Take Your House

While Medicaid’s primary goal is to provide healthcare coverage, there are situations where your home may be at risk:

  1. Single and Moving to a Nursing Home
  2. If you’re single and move to a nursing home, Medicaid generally cannot take your home. However, once you pass away, the home may become subject to estate recovery.
  3. Married and One Spouse Moving to a Nursing Home
  4. When one spouse moves to a nursing home, the home is generally protected. However, if that spouse passes away, the home may still be subject to estate recovery.
  5. Both Spouses Have Passed

If both spouses have passed away, the home may be subject to estate recovery. This scenario highlights the importance of planning ahead.

Steps to Prevent Medicaid from Taking Your House

Protecting your home requires proactive measures. Here are some strategies:

1. Keep Assets Out of Probate

Avoid probate by using legal strategies such as living trusts. By doing so, you can ensure that your home passes directly to your heirs without going through the probate process.

2. Irrevocable Trusts

Consider placing your home in an irrevocable trust. This legal arrangement allows you to retain some control over the property while protecting it from Medicaid estate recovery.

3. Long-Term Care Partnership Programs

Explore the long-term care partnership programs available in your state. These programs allow you to protect a portion of your assets while still qualifying for Medicaid.

4. Caregiver Exemption

Some states offer exemptions for caregivers who have lived in the home and provided care for the Medicaid recipient. Check if you qualify for this exemption.

5. Sibling Exemption

In certain cases, siblings living in the home may protect it from estate recovery. Understand the rules in your state.

6. Work with a Medicaid Planner

Seek professional advice from a Medicaid planner or elder law attorney. They can guide you through the complexities and help you create a plan to safeguard your home.

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