How Selling Your Home Can Impact You as a Medicaid Beneficiary
It is no secret that the cost of skilled nursing care has continued to rise year over year. Genworth reports the average monthly cost for nursing home care in Kentucky is just over $7,600 for a private room and $6,844 for a semi-private room (2018). With numbers like these, it’s easy to imagine that most Kentuckians cannot maintain a monthly expense of this amount. Many seniors rely on Medicaid for cost assistance once their assets are depleted. Part of this process includes selling what is likely their largest asset, their home. It is critical to understand how selling a home can impact a person’s eligibility for Medicaid.
Medicaid requires a home be sold for the current tax assessed value, or higher. While this is not typically an issue for a home that has been well-maintained, it often renders a challenge for homes with deferred maintenance and lack of overall upkeep/updating. It is extremely important to have a new appraisal performed in advance of selling any property that may sell for less than the current assessed value. Penalties may be issued by Medicaid for selling under assessed value, potentially disqualify a person from Medicaid or substantially delaying coverage. This, clearly, could be catastrophic.
None of us can predict what the future holds for our health. It is extremely difficult and overwhelming to deal with an unexpected sudden decline in health when proper preparation is not employed. Medicaid has a five year “look-back” period in which they evaluate a person’s financial activity and assets to determine eligibility. Many seniors and well-intentioned family members find themselves in messy situations relative to their Medicaid benefits after selling property while in good health and not taking the proper precautions. It is vital to consult both an experienced Senior Real Estate Specialist and a trusted elder law attorney for long-term planning.
For more information about long-term planning, real estate decisions, and care options, we invite you to join us at our quarterly Donuts and Downsizing event. A professional panel of elder law attorneys, senior real estate specialist/realtors, and senior placement specialists converse with the public about these topics and more. Call Jackie Exum at (502) 345-2557 for details on the next Donuts and Downsizing.