While some Medicaid programs do allow recipients to own a primary residence, it is crucial to plan to protect your home. Especially for those that may require nursing home care, available asset exemptions or estate planning strategies may be required to achieve Medicaid eligibility.

First, you must understand the distinction between Community Medicaid and Chronic Medicaid because the rules are different.

Is There a Lookback Period for Community Medicaid?

For Community Medicaid, which provides in-home care, there is no lookback period. This means that the program does not investigate whether you transferred assets out of your name prior to seeking assistance. For the most part, you will be deemed eligible if the assets in your individual name do not exceed the allowable limit on the first of the month in which you apply for Community Medicaid. Transferring assets in the months or years prior will not create a penalty period or period of ineligibility.

What About Chronic Medicaid?

If you need to apply for Chronic Medicaid which covers costs associated with long term nursing home care, Medicaid will review your finances for the preceding five years. Any gifts you made or assets you transferred will be reviewed to determine if there will be a lapse in time before Medicaid will pay on your behalf as a penalty for these transactions.

When is a Home Exempt From Medicaid?

If a Medicaid applicant’s spouse, disabled child, or minor child continues to live in the residence, a home of any value is an exempt resource. Without an exempt family member living there, the home for a Community Medicaid applicant is exempt if the value is less than $1,097,000. But beware! Planning is still recommended to avoid a lien being placed at death if the deed is in the Medicaid recipient’s sole name requiring probate or administration in the courts.

Can You Transfer a Home to Qualify for Medicaid?

Despite the Chronic Medicaid lookback on any asset transfers made during the five years preceding application, there are certain exempt property transfers that can be undertaken.

The applicant may transfer the home to a spouse, disabled child, or child under 21 years without incurring a penalty. If a caretaker child lived with and cared for the applicant for two years prior to entering a nursing home, the transfer to that child will also be exempt. Lastly, the transfer to a sibling who lives in the home and has an equity interest will also be exempt.

While there are options to become eligible with short notice, if someone knows they are prone to certain health conditions, they should consider advance planning by establishing an irrevocable trust that allows for Medicaid asset protection.

By Britt Burner, Esq. and Erin Cullen, Esq.

Britt Burner, Esq. is a Managing Partner, and Erin Cullen, Esq. is an Associate Attorney at Burner Prudenti Law, P.C. Burner Prudenti Law, P.C. serves clients from New York City to the east end of Long Island with offices located in East Setauket, Westhampton Beach, Manhattan, and East Hampton.