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Protecting the Home – Part 1

I received a call last week which again highlights the risk of handling a Medicaid application on your own. As I often say, the application may appear to be easy but you never know when you’ll run into an issue or problem. When that happens it is important to have someone who has knowledge of the ins and outs of Medicaid on your side.

Mary called me to ask a question concerning her friend, John. John is in his 60’s and has a daughter, Amy, 21, who is attends college in Pennsylvania. John has MS and cannot live at home any longer on his own with Amy away at school most of the year. He moved to a nursing home and she applied for Medicaid on his behalf.

Amy ran into a snag with Medicaid and Mary was trying to help her out. The caseworker informed Amy that John would need to sell his home and spend down the proceeds in order to qualify. She said Amy had just listed it for sale but Mary wasn’t sure if what the caseworker said is correct.

I asked Mary what Amy’s plans are after she graduates college. She told me that Amy would like to live in the home and possibly bring John back home to live with her. I told Mary that if John has an intention to return to the home and his absence from the home is temporary it could still be treated as an exempt asset. Amy is a senior so her plan is to return to the home in less than 1 year.

I also told Mary that as long as a family member is living in the home, Medicaid policy is not to force the sale of the home. I would argue that Amy still lives there since her schooling is temporary. She continues to reside in New Jersey and not Pennsylvania.

Mary was relieved to hear that but asked me why the Medicaid caseworker did not explain this. I told her that the caseworkers cannot give legal advice. Their job is to process the applications. I also explained that sometimes the caseworkers are not as knowledgeable about the regulations as you would think. That is why you risk a bad result by going it alone. You never know when you are getting correct or incorrect information.

I also told Mary that unfortunately Amy already missed out on another opportunity to protect the home entirely by removing it from her father’s name without causing a Medicaid penalty. Next week I’ll explain that missed opportunity.