A common misconception is that you must sell your house to qualify for Medicaid or that the nursing home will take your house. Although you generally do not need to sell your house to qualify for Medicaid, and the nursing home will not literally take your house, the fear of losing your house to the cost of long-term care is warranted. Your primary residence is not a countable resource when determining Medicaid eligibility where certain exceptions apply. One of those exceptions is where the Medicaid applicant (the individual requiring skilled nursing care) is married and their spouse is residing in the house. Where there is a spouse residing in the home, the value of the home will not be counted as an available resource for Medicaid. However, if the house is sold or if the spouse moves from the house the protection is lost. Also, there is always the risk that when the Medicaid recipient dies, the state will attempt to collect the value of the home through a process called estate recovery. Where the Medicaid applicant is not married, Pennsylvania does have other exemptions available to protection the home, if applicable. One of those exemptions is the Child Caregiver Exemption.
The Child Caregiver Exemption allows for the transfer of a parent’s primary residence to the “caregiver” child without a transfer penalty. To qualify for this exemption, the Medicaid applicant must demonstrate that they meet the requirements of 55 Pa. Code §178.104(e). Those requirements are as follows: (1) the child has resided in the home with the parent for at least two years immediately preceding the admission to the nursing home; and (2) that because the child provided care to the parent, the parent was able to remain at home instead of entering a skilled nursing facility for those two years.
It is important to know that the Pennsylvania Department of Human Services reviews each request for the child caregiver exemption on a case-by-case basis. The DHS will require that a letter be obtained by the Medicaid applicant’s physician which articulates the parent’s current diagnosis and limitations, memorializes the doctor’s awareness that the caregiver child was providing care for a period of two years, and that without the care provided by the child, the parents would have required care in a skilled nursing facility two years prior. Verification of the child’s residence in the parents’ home is also required.
If you or a family member needs to apply for Medicaid, and you believe that a child qualifies for the Caregiver Child Exemption, it is very important to consult with an Elder Law Attorney that can properly explain the exemption and assist you with applying for Medicaid and claiming the exemption. It is also important that you understand the various tax implications with the transfer of the home.
The legal advice in this column is general in nature, consult your attorney for advice to fit your particular situation.