Potentially Becoming Caregiver: Losing the House via Medicare/Medicaid Asset Recovery upon Death

Submitted by KyaDash t3_10uf5y4 in Pennsylvania

I have for the past several years acted as the caregiver for my father, and in recent months have been working towards potentially legally being recognized as such to have some sort of income rather than just only burning my life away and taking on increasingly more burden with 0 money to actually show for anything.

However, on that note, on a random discussion, a point came up that has me quite worried.

Is it true that, were I to become a legal caregiver/care management provider/etcetcetc, that once/if the care receiver passes(my father) that the state or otherwise will take the house in payment or similar? As of current, the mortgage is paid off, and it's just been a matter of keeping on top of bills and taxes, and actually having some sort of positive outlook for myself instead of having my existence put entirely on hold for the sake of others would be genuinely nice, but if it would lead to being out of a home or otherwise at the end of everything, it feels like it'd be a horrid mistake in the making.

It was suggest that I ask this over here for some potential in-state responses from /r/caregivers , the post of which can be found here

I apologize if this isn't a good fit for this sub, but just trying to get some input if possible.

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ohtheinsandy t1_j7ch3h4 wrote

Hello, I’m a previous PA state worker in Long Term Care Medicaid, and I worked for a nursing home getting Medicaid for our residents, so I have experience here, but not as a caregiver.

The short answer is, yes, there is a way you can get to keep the house after your father passes, but I would definitely seek out an elder care attorney to make sure it’s done right. (Look for a lawyer that specializes in elder care - I wouldn’t trust any other kind in this situation. I have met way too many lawyers who will do what you ask but have zero experience)

The long answer: If your father uses Medicaid (not Medicare) to pay for a caregiver, that is considered Long Term Care and he is subject to estate recovery after he passes. I assume this is what you’re seeking - it is very common for family to seek getting payment for caregiving, because it is more than a full time job in of itself. This is called Home and Community Based Services (HCBS) or “waiver services” in PA. Estate recovery means that PA will try to recoup expenses from any assets your father may have left after he passes, which can include the house.

However, there is a guideline in Medicaid rules that a house can be transferred to you without penalty in this very specific situation: -must be a son or daughter of the Medicaid recipient -must have lived in the recipient’s house for at least 2 years -must have provided care to the recipient that prevented the recipient from having to go to a nursing facility (verified with a letter from a doctor)

I’ve seen this referred to as the caregiver exception. This exception exists, I believe, because Long Term Care is very expensive for the state. So if you can prove that you’ve basically saved them money by providing caregiving for at least two years prior, that is at least worth the value of the house to them.

I don’t know how long you’ve been living in your father’s house, but it sounds like you would qualify for this exception. I would start this process ASAP, even if he’s not on Medicaid yet.

Again, DEFINITELY go through an elder care attorney to get this set up, so it’s all done correctly. But feel free to ask me any questions if there’s anything I missed.

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KyaDash OP t1_j7crylq wrote

Thank you, a lot of this has been very informative.

And to respond to some of the points: He is and has been on medicaid (and medicare) for a sizable amount of time, it's just now that we're exploring care management sorts of things.

I have certainly lived with him for the quoted period (several times over); I put off/abandoned plans to move out to go to school...10 years ago now for medical/mental well being reasons for my mother (primarily the latter) and never managed to "leave escape the nest" as it were. Not even taking into account cases where he had come down with flu/pneumonia or otherwise, I've been practically speaking a full time caretaker for him since covid hit, triply so since my mother passed in Dec 2020, honestly to what is very likely an unhealthy degree. House duties, cooking, grocery shopping, medical appointment attendance as well as scheduling/handling most affairs in that sort of realm.

Asset wise, sans the house, which to be frank isn't even in the best shape itself, and the quite dubious condition vehicle I/He inherited when my mother passed, there's not much of anything; At most a small balance carried month to month after expenses are dealt with from his monthly social security payment.

He seems very suspicious/incredulous that this (the asset recovery thing) is actually a thing due to various friends or acquaintances of his that have done similar things as either the giver or the givee.

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ohtheinsandy t1_j7cvmyh wrote

Caregiving is no joke. Kudos to you for the years of hard work you’ve put in. I haven’t done it personally but have encountered many caregivers in my line of work. It’s understandable to doubt that estate recovery happens in PA. The state only looks at transfers of assets (like houses) for a period of 5 years prior to applying to Medicaid, so many people avoid the problem entirely by transferring property early. And the enforcement of estate recovery varies. I noticed the state being more aggressive with estate recovery in the past few years though, so I personally wouldn’t take the chance. Another side note - it is way easier for a living person to transfer a house than it is to go through probate after the person passes away to gain ownership. That is why I would work on this ASAP.

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olive_ate_my_pimento t1_j7c21uc wrote

Yes. There is a 5 year "look back rule." If you google that, you will either find the information you are looking for or you will know specifically which questions to ask.

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Radiant_Ad_6565 t1_j7bv35u wrote

If the mortgage is paid off, your father can quit claim deed the house to you or a sibling. He can also gift you any cash assests, annnuities, CDs, bonds etc.

The caveat is that the state can retroactively attach any assests he disposed of. Ohio goes back 5 years, not sure about PA. So you hope he lives that amount of time and a day if you go this route.

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Odd_Shirt_3556 t1_j7ce7un wrote

If the Commonwealth pays for your dads care, even to you, then they can use his assets to recover their costs. There s a 60 month window in which they can demand the return of any asset that has been given, gifted, or transferred. If you can no further provide care of him, as soon as he hits the nursing home, his assets come into play. While there is a law called the Spousal Impoverishment Act, it only applies to spouses and it outlines specific items or percentages that must be considered or included in the taking of assets.

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IamSauerKraut t1_j7bpn2d wrote

Go find yourself a public interest lawyer. As even general practitioners have a tough time navigating thru this area of law, you'll get tripped up real quick and run the risk of losing it all to some bureaucrat.

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salemvillewitch t1_j7cgxht wrote

Talk to an Elder Care attorney.

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malogan82 t1_j7csd2c wrote

Chiming in to second this. There may be options available to you short of "give up the house to the state, but you're in crisis mode so you need to talk to an estate/elder care attorney now.

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JessicaDAndy t1_j7hbw8s wrote

To be very specific, if the house is your father’s house, and your father’s house alone, you can go to to your Dad’s case worker to do a transfer of ownership with proper proof of care, residency and no alternative residence now to transfer the deed from your father to you.

If you wait until after your father passes, and the house was his and his alone, you go through DHS Estate Recovery where you have to prove to them care, residency and no alternative residence,

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Giiyyttttt t1_j7bi11n wrote

What are you asking?

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