Medicaid is a government-funded health insurance program that helps pay for medical costs for some people who can’t afford them. It’s an important safety net for many Americans, and it can be beneficial for those who need long-term care. But what happens to a jointly owned home when one spouse receives Medicaid payments for long-term care? Can Medicaid take a jointly owned home away from the other spouse? Let’s explore Medicaid recovery in North Carolina and find answers.
What is Medicaid Recovery in North Carolina?
If an eligible Medicaid recipient receives funds for long-term care, Medicaid Estate Recovery often files a claim against their estate to recover Medicaid dollars paid on their behalf. North Carolina Medicaid Recovery does not initiate until after the beneficiary’s death, and in some situations, NC waives recovery.
NC Recovery services recoup Medicaid funds that paid a portion of an individual’s cost of care. Medicaid recovery attempts to reclaim funds used to cover:
- Nursing facility cost of care
- Related hospital expenses while residing in a nursing facility
- CAP services
- PCS services
- Prescription drugs
Does Medicaid Place a Lien on My Home?
Medicaid recovery does not include placing a lien on the family home. Instead, a deceased spouse’s estate receives a bill from the Division of Health Benefits (DHB).
Third-Party Recovery (TPR) collects against the estate if the estate does not pay the claim. TPR works with the estate administrator to repay the Medicaid costs North Carolina paid for the deceased beneficiary.
Can Medicaid Take a Jointly Owned Home in North Carolina?
If you’re married and one of you receives long-term care payments from Medicaid, you may wonder what happens when the spouse who received care dies. The house now belongs to you if you jointly own a home with the right of survivorship. However, if your estate cannot pay back the funds your spouse used for Medicaid, you may need to sell your home to pay back the state.
There are some circumstances when DHB does not recover from a beneficiary’s estate. DHB waives recovery when:
- Total assets in the estate are less than $5000
- Full Medicaid benefits paid for your spouse’s care were less than $3000
- Undue Hardship Waiver: The spouse (or other relatives) may apply. A hardship waiver may exclude some or all assets from DHB recovery efforts. As a spouse, you may qualify for a time-limited “Deferral” if you meet specific eligibility requirements.
Do I Qualify for a Deferral?
As the spouse of a Medicaid recipient, you may qualify for a deferral if the real estate or personal property included in the estate is your sole source of income and your gross income is below the 200% federal poverty level.
You may also qualify for a deferral if Medicaid recovery payment if you meet all three of these requirements:
- Paying the claim would cause a forced sale of the home you now live in (and lived in for at least 12 months before spouse died)
- Your household gross income is below 200% of the federal poverty level
- Your total assets are less than $12,000
Other conditions can help you qualify for a deferral, so speaking with your estate planning attorney is best if you need help determining if you qualify for a Medicaid Recovery deferral.
How Long Does a Deferral Last?
DHB may continue its efforts to regain the funds spent by Medicaid when the hardship condition is no longer present.
For example, let’s say that your spouse goes into a nursing home and passes away six months later. At that point, you may apply and receive a hardship waiver since you are still living in the house and need the resources your spouse left behind. However, if you also pass away later that year, Medicaid Recovery (DHB) will again make a claim on your spouse’s estate for their Medicaid cost of care.
Make a Plan NOW to Protect Your Home from Medicaid Recovery
If you open a Medicaid protection planning trust at least five years before you need Medicaid, you can keep benefitting from your assets while still qualifying for Medicaid. A Medicaid trust holds your assets for you so that you no longer “own” them. Instead, a trustee you choose manages your assets for your benefit.
You can place your home, insurance policies, retirement accounts, and more in a trust. Everything put into a Medicaid trust is safe from Medicaid Recovery efforts.
When you plan ahead, you can ensure that your children do not receive a bill from DHB to cover Medicaid expenses using your estate. You also protect your spouse from any legal actions related to getting a deferral.
We Can Help
Whether you are planning early or it’s time to apply for a Medicaid deferral to hold onto your family home, our estate planning attorneys at Cape Fear Law can help. No matter what you are going through, it’s essential to understand all of your options and how Medicaid recovery works in North Carolina so that you can make the best decision for yourself and your family. If you have any questions, please feel free to reach out to us! We’re here to help.
References:
- https://policies.ncdhhs.gov/divisional/health-benefits-nc-medicaid/family-and-childrens-medicaid/family-and-childrens-medicaid/ma3326.pdf