Understanding long-term care and the role of Medicaid

Dear Michael: My husband is in a long-term care facility and has been for quite some time. We didn’t have money to pay for long-term care, nor insurance, so we applied for Medicaid.

Every year I have to report my income to Medicaid and if I am over the limit of $2,800 per month, I have to send the additional to Medicaid at the end of the year.

During this time, the state decided they wanted to be the ward for my husband. They are now the guardians for him. Shortly after, divorce papers came from my husband in the facility. His mind isn’t right and I don’t know if he wanted this or not. My reason for writing you is I live on our original farmstead and rent out the property for income, along with Social Security. Can I transfer this farm to my children so that doesn’t go to pay for care, as well? I worry I will have no place to live if this continues.

– Never Thought

Dear Never Thought: You have a very tough situation. The monthly Medicaid allowance for income to the spouse outside the facility, the community spouse, was set years and years ago. Unlike other aspects of Medicaid, this monthly allowance does not have any cost of living inflation built into it and the amount stays the same. This is tough when the costs of heating, electricity, food, insurance for yourself and your home all are going up higher and higher while you are on a set amount. Very few people can live on this amount and I’m sure you count every penny.

In regards to what Medicaid can take away from you, as a community spouse, you are allowed to keep the home you live in as long as it’s not worth more than $500,000. You also keep any land that is attached to the home or is contiguous to the home.

In other words, the land has to be touching in some manner whether it’s side by side with the quarter you are living on or just touching in some way. As long as I can take a pen and draw a line on a map moving across your land with no breaks, all of this land cannot be taken currently.

If you have land separate and not touching your homestead land, this then falls under the value you are allowed to keep of total assets. Last check this amount was around $130,000. You get to keep one-half of your other assets, savings, land, retirement funds, life insurance cash value, up to this amount. If you exceed this amount, then this can be taken to pay for care.

If you only have this amount, remember, you only get to keep one half of your assets up to, and that’s very important, one half of $130,000. If this dollar amount is all you had extra of your non-contiguous land and other assets, then you’d have to give up one-half of the $130,000. The only people that come out in this situation are people who just happen to have $260,000 so that one-half would be the $130,000 allowed.

Now we’ve established you can keep your land and the income from it as long as it is contiguous and does not exceed the $2,800 a month.

However, you only get to keep this land as long as you reside in the home on the farmstead. If you should move, have to move or die, there’s likely a lien on the property filed by Medicaid for the costs of care for your husband. They can’t enforce the lieh as long as you live there because of your spousal rights, but if you move off the homestead, then your rights to it cease.

The reason you got the divorce papers is that Medicaid was tired of waiting for their money. If you had agreed to this divorce, your husband would have gotten half of the property which Medicaid could have promptly sold to pay off some of his debt.

You might try and shift the land to your daughters via quit claim deed, but don’t be surprised if you get a letter from the county registrar or Medicaid telling you that you can’t do that. But there is a chance Medicaid has yet to file a lien on the property. Give it a try to see what happens.

Michael Baron works with Great Plains Diversified Services Inc. in Bismarck, N.D. Write to him at 1424 W. Century Ave., Ste. 208, Bismarck, ND 58501; phone him at 800-373-4078; or send email to KeeptheFamilyFarm@gmail.com. His website is KeeptheFamilyFarm.com.

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