Medicaid is a health care program provided by the United States to support those that are not capable of paying their hospital bills themselves.
But once you are eligible for Medicaid and you want to sell your house, the question is: How will Medicaid know if I sell my house?
Medicaid will know you sold your house through your financial report. Since Medicaid checks bank accounts, they know you’re not capable of paying the healthcare costs. Therefore, while re-registering for Medicaid, your financial records would be looked into, and there, they will know that you sold your house to have so much money in your account.
You can’t sell your house after you are eligible for Medicaid. This is because the money you get from it will be more than the money you should have in your account. If your house is not sold, it won’t affect your eligibility status. So selling it or renting it out while in the nursing home will affect your eligibility status.
Can I Sell My House While on Medicaid?
You can’t sell your house while on Medicaid to avoid getting disqualified from the program. If you sell your house while on Medicaid, the amount in your account will be greater than the income you claim to earn. Also, there’s no way your savings won’t be more than the stipulated amount of the state.
Rather than selling your house while on Medicaid, you have to prepare ahead. If you want to sell the house before being eligible for Medicaid, you can, and if you want to transfer it to your children or family member, you can. There are different strategies to doing this.
Although Medicaid has its general eligibility status, each state also has its specific eligibility status also. The federal and state government manage the health program.
The general requirement for one to be eligible for Medicaid is not being able to earn much income and in some cases, you can’t have more than $2000 in your account. This is why many people tend to sell their houses, exotic cars because they want to look like they can’t afford hospital or nursing home bills.
You can actually be eligible for Medicaid and have a house, a car, and jewelry as long the income you earn for five years is low. Your house and car are assets that won’t be taken.
However, it will be weird to be on Medicaid and buy a house. How can you afford to buy a house yet can’t be able to take care of yourself health-wise? Therefore, while on Medicaid, you cannot buy a house else your Medicaid program will be terminated.
How Will Medicaid Know if I Sell My House?
Medicaid will surely know if you sell your house. They’ve monitored your earnings for the past five years to know that you aren’t capable of paying the healthcare costs. Also, they have the documents of your financial records.
Moreover, when it comes to Medicaid, you have to re-register for the program. So while re-registering, your financial records would be looked into.
Unless you’ve transferred your house to your family member earlier on, you can’t sell your house. The proceedings from the sale will alert the authorities and your Medicaid coverage will be terminated.
Pros of Selling My House While on Medicaid
The advantages of selling your house while on Medicaid can only be pointed at by an elder law attorney. This is because, without their help, you will lose the proceeds from the house if you sell it.
Not only that, you will lose your Medicaid coverage. It is better to be familiar with the Medicaid requirements in your state before you sell the house.
Future Savings
There are ways you can save your proceeds from the sale of your house. When you have your elder law attorney, they’ll help you around it.
One of them is having irrevocable trust for burial. This is the money to cover the cost of your funeral. You can leave up to $15,000 to a child. You can actually leave up to that to each child.
If you have many children, you are lucky. This is even a better option because your children wouldn’t have to take a loan for your funeral. The only thing you do is inform Medicaid within ten days of selling the house. If not, you will lose your proceeds.
Payment of Loans
When you sell your house while on Medicaid and you don’t want your Medicaid coverage to be terminated, you have different options to pick from. You’ll be guided by your elder law attorney.
One of the ways is to pay off loans with the proceeds. You might not have the money to pay off your debts so selling your house while on Medicaid might be a good idea to get money to pay off the loans. You’ll have your peace of mind after that.
Cons of Selling a House While on Medicaid
If you don’t have a competent elder law attorney, don’t even try to sell your house while you are on Medicaid because there are cons to doing so.
1. Loss of Medicaid Coverage
For you to be on Medicaid means you can’t pay for your healthcare costs due to low income, age, or disabilities (depending on different states). Whatever eligibility status you met, your Medicaid coverage will be terminated if you sell your house without alerting the authorities within ten days. If you sell the house in your name, you will be tracked and you will be seen as a fraudster.
2. Spending Down Your Assets
If you sell your house while on Medicaid, you can’t keep the money in your account. You’ll have to spend it down to $2000 and this is a big loss to you. If your Medicaid coverage is ended, you’ll also need to spend down the money to qualify for Medicaid again.
3. Extra Expenses
If you have an elder in a nursing home and you sell the house of the applicant in his/her name, the person will be cut off from Medicaid. And when cut off, you have to spend the proceeds on paying for your healthcare cost. That’s going to be a lot of money and you might have to start trying to get a loan which will be detrimental to you.
Do I Have to Pay Back Medicaid if I Sell My House?
If you sell your house, Medicaid won’t collect the proceeds, you will only be disqualified from the healthcare program unless you spend down the money and apply again. The application is actually not that simple especially if yours was terminated earlier.
How Do I Stop Medicaid from Taking My House?
The best way to stop Medicaid from taking your house is to avoid Medicaid Assistance Estate Recovery or else, your house will be taken from you. You can also stop Medicaid from taking your house by hiring a competent elder law attorney to guide you through the whole process.
When it comes to Medicaid, it is better you have an elder law attorney that will be ready to guide you through the process without any issue along the line.
When you apply for Medicaid, you will have countable and uncountable assets. Uncountable assets include your primary residence, car, household items, and jewelry.
Now when signing your Medicaid form, you might have signed up that Medicaid should take the house probably when you die. The thing is you wouldn’t know you signed it because of how many documents were presented to you.
Therefore, to avoid Medicaid taking your house, avoid Medicaid Assistance Estate Recovery. If you don’t, your house will be taken when you die.
Also if it’s a spouse or family member that is in the nursing home, you can have two or more joint owners of the house. The spouse holding the life estate owns the house till his or her death. Immediately after the demise, the second owner becomes the legal owner until his/her death till it goes on and on.
By doing this, Medicaid won’t be able to take your house. When it comes to Medicaid, you have to carry your elder law attorney along, so that you won’t be taken by surprise.
Final Thoughts
Applying for Medicaid is one way to save the money you could have used to pay your healthcare costs. But before you do so, be familiar with the Medicaid requirements in your state and have an elder law attorney to guide you through the process especially if you want to sell your house to avoid asking the question: how will Medicaid know if I sell my house?
