Medicaid Application for Nursing Home Resident

[LawReader]

Jurisdiction

Illinois

Hello forum members.

In this situation one spouse who is living in a nursing home which has been paid for by LTC insurance soon needs her nursing home stay to be paid for by Medicaid. She owns the marital home and needs to sell that house quickly without incurring a Medicaid penalty for selling at less than fair market value.

I'm hoping someone can clarify whether in Illinos, Medicaid Regulations regarding sale of a nursing home resident/property owner's home by the spouse/POA (finance and health care) on behalf of the nursing home spouse, can be accomplished by sale to an "outsider" (one who is neither family member or friend) in an "arms length transaction" for less than fair market value for reasons such as paying off mortgage and credit card debt of the nursing home resident but at less than fair market value without Medicaid assessing a penalty in an amount, and thus for a time period, connected to the difference between fmv and sales price.
I ask because I think I read something in IL. Admin Regs on fmv in Medicaid eligibility situations that sites a section of the Federal Public Health and Welfare Code, that, when read together excludes "the home" from fmv analysis if sold to an outsider in an arms length transaction.

Would someone please let me know what I am missing? If I don't get this right my spouse will, most likely, be discharged (read evicted) from
this privately owned nursing home.

My sincere appreciation to anyone who would explain this knowledgeably.

 

[army judge]

Medicaid will learn about any sale of your home.
There's no good way to avoid that.
If you have money or income, it can't be hidden, you'll regret it if you try.

No one on this forum will instruct you about committing fraud.

 

[LawReader]

Medicaid will learn about any sale of your home.
There's no good way to avoid that.
If you have money or income, it can't be hidden, you'll regret it if you try.

No one on this forum will instruct you about committing fraud.

It's a question about following the law, not breaking it. The point is that the law in this matter is a reference to a regulatory exclusion on fmv which incorporates language from title 42 to specify the exclusion.
So, it is a question of a possible safe harbor created by the regulators when creating rules for disposition of property within or without the lookback period.

 

[flyingron]

Transferring the home at less than FMV, is going to be held with skepticism no matter how you slice it. At FMV, the sale is fine on its own, but the question is then going to be where did the proceeds go. This is complicated. The couple involved should be working with proper legal counsel, not some third-hand advice from an internet bulletin board.

 

[LawReader]

Transferring the home at less than FMV, is going to be held with skepticism no matter how you slice it. At FMV, the sale is fine on its own, but the question is then going to be where did the proceeds go. This is complicated. The couple involved should be working with proper legal counsel, not some third-hand advice from an internet bulletin board.

 

[LawReader]

That is good advice. The couple will consult. They need to prioritize some medical issues first. I'm hoping an attorney practicing Medicaid applications might consider what looks like an exception to fmv rule. All will be made transparent to the state. Proceeds of sale go first to real estate agent and closing counsel, then to pay off mortgage and credit card debts.
I am hoping a forum attorney might advise on the
apparent exclusion. The more info we have, the more we can learn from consult with specialty counsel.
Thank you very much for your post. Definitely we need consult and to have the app prepared by counsel.