This week’s blog continues the discussion of the changes to Ohio Medicaid’s Aged, Blind and Disabled program coming in 2016-2017. The initial installment (April 28, 2016) provided an overview of the transition from the old system (following section 209(b) of the federal Medicaid law) to the new system (that will follow section 1634 of the federal Medicaid law.) The May 5, 2016 installment discussed the new income rules that will go into effect with the new eligibility system. The May 12, 2016 installment discussed setting up a Qualified Income Trust (aka Miller Trust) that will be necessary for people who need ABD Medicaid to help pay for long term care. The June 16, 2016 installment discussed the Ohio rules that describe how to use the Miller Trust each month. The June 23, 2016 installment discussed the difficulty in understanding the need for a Miller Trust. The July 1, 2016 installment discussed the need to empty the Miller Trust account every month. The July 7, 2016 installment discussed the need to balance the Miller Trust with the desire to have health insurance. The July 15, 2016 installment discussed the confusing deposit rules for Miller Trusts. The July 21, 2016 installment discussed the changes that the Ohio Department of Medicaid made to the form Miller Trust document. The July 28, 2016 installment discussed whether income is supposed to go directly into the Miller Trust. The August 4, 2016 installment discussed Medicaid’s insistence that the transfers (or deposits) into the Miller Trust account be automatic. The August 11, 2016 installment discussed money that doesn’t actually reach the Medicaid-recipient that, nonetheless, counts as “income” for purposes of using a Miller Trust. The August 18, 2016 installment discussed the appearance that a person on long term care Medicaid has an increase in income when he/she stops paying Medicare premiums. The August 25, 2016 installment discussed the impact of tax withholding on certain income sources and the difficulty that the tax withholding creates for the Miller Trust. The September 2, 2016 installment discussed the limit placed on monthly costs of the Miller Trust. The September 9, 2016 installment discussed how Ohio’s Medicaid rules appear to count income tax refunds twice. The September 15, 2016 installment discussed the Ohio Department of Medicaid’s change in policy regarding real estate (other than the residence.) Today’s installment will discuss the intent to return to home.
Before July 31, 2016, a single person who asked for Medicaid’s help to pay for long term care costs and who owned a home had 13 months after the beginning of Medicaid coverage during which to put the home up for sale. (If the Medicaid applicant were married and the spouse still lived in the home, there was no obligation to sell.) That 13-month time period is gone. As part of the big August 1, 2016 change in rules, Ohio Medicaid rescinded the 13-month rule. Now, the person must decide to keep the house or to sell the house before applying for Medicaid.
If the person decides to sell, then the rules regarding real estate discussed in the September 15, 2016 installment apply.
If the person decides not to sell, then one of a number of certain conditions must apply. The most likely condition that Medicaid recipients will invoke is the “intent to return home.”
If the person intends to return home, he/she is not required to sell the house before getting Medicaid coverage. The intent to return must be expressed in a written, signed statement. This exemption of the house ends if the person establishes a “principal place of residence” anywhere else. This new “principal place of residence” is, in my opinion, how people will be tripped up in obtaining or keeping Medicaid coverage.
If a person has been in a nursing home or assisted living community for many months (unless on rehab,) I doubt that the house can be called the “principal place of residence.” If the person’s health isn’t likely to improve, the “principal place of residence” has probably become the nursing home or assisted living community. Even if the “intent to return home” is real, it may not be realistic. The “principal place of residence” allows Ohio Medicaid to avoid covering someone whose intent to return home is not realistic.
Now, during this first year or two under the new rules, I’m not sure that Medicaid will challenge an applicant’s written statement of an intent to return home. (There are so many changes, and they are so complex, that I expect the county Medicaid offices to be overwhelmed trying to keep up with new applications and annual renewals. For example, the computer changes that the new rules necessitated have not gone well. Some county Medicaid offices have been unable to process applications for weeks.) At the person’s annual renewal, however, if he/she is still in the nursing home or assisted living community, the Medicaid office can decide that the house is no longer the “principal place of residence.” (By the time of the first annual renewal, the person will have been out of the house for at least a year, after all.) Medicaid coverage can be suspended until the house is sold and the proceeds spent.
Even if the Medicaid office allows the person to keep the house (i.e., Medicaid accepts the person’s statement of intent to return home even if it’s not likely that the person can ever return,) the person will not have money to keep up the house. Medicaid rules allow the person to keep only $2,000 in savings and $50 of monthly income. The person can’t keep up with property taxes, insurance, and maintenance on the house with that low amount of money.
In addition, if the person keeps the house until he/she dies, Medicaid will place a lien on the house for the amount of money that Medicaid spent on the person’s care. (A lien on real estate is one of the methods of “estate recovery” after a Medicaid recipient dies.)
For a single person who needs Medicaid’s help to pay for long term care who owns a home, I suggest that the person decide what will happen with the house before applying for Medicaid rather than kicking the can down the road. The statement of “intent to return” might be a way to delay making a decision, but the inability to pay to keep up the house will put the person in a financial bind quickly and also might cause the house to lose value. In addition, the risk of Medicaid estate recovery always looms over the house. For these reasons, I suggest dealing with the house (or at least deciding what to do with the house) sooner rather than later.
Letting go of the house is terribly emotional. Still, I think it’s better to deal with it sooner rather than later.