My grandmother owns her home in TN, but is unable to afford the upkeep on top of her other bills. She is currently disabled due to Renal Failure and is on Medicaid QMB and Medicare, but does not require long term care at this point. She would like to sell the house and move into a small apartment with low maintenance. Other than her home, car and monthly SSA benefit of about $900, she has no other assets, including cash. The house is not worth more than $100,000.
Due to her renal failure, she requires dialysis three days a week, and at this point takes ETHRA (transportation) to/from there. What will happen when and if we sell the house? Will she lose Medicaid and/or Medicare? What is the best course of action for us?
So in short, at least here in Michigan, YES, she would lose Medicaid. It would gain you nothing to sell the house, because the money would have to be spent down before she would qualify for Medicaid again. This would leave her responsible for all of the expenses that Medicare doesn't cover.
Also - don't transfer the house to anyone else's name - that's the same as selling it in the eyes of Medicaid.
I moved in with my mother when my father passed away and it became apparent that she couldn't live alone because she was falling and couldn't manage her finances. (Dad always did all of the finances - she had no clue even how to balance the checkbook.) Mom and Dad owned the house jointly, so when he passed away, it went into Mom's name.
Mom is now in a nursing home on Medicaid, and I still live in the house, pay the mortgage, taxes and utility bills myself. I'd love to sell it and move, but I can't - 1) because Mom needs me close by, and 2) because if I sold the house, it would immediately disqualify Mom from Medicaid for as long as it took to spend down the money from the sale of the house. That means that the nursing home bill of over $8,000 per month would be her responsibility - so with a house that is probably not worth more than $40,000 at the most, that money would run out quickly, and then we'd have to re-qualify her for Medicaid - and I'd have to find someplace else to live, on top of it.
Many caregivers are in this situation.
For Medicaid, the ? will be about if she sells the house, what she does with the assets (the proceeds) from the sale. If she just rents & keeps the $ as savings, then she will be ineligible for Medicaid as she has too much $. End-stage renal may have a different criteria for eligibility, so ask the atty if so.
But if it's a lateral sale…like she sells old house for 90K and buys a house with a better layout for her needs for 90K, there's no asset or income gain, so should not be an issue for Medicaid. The tricky part is getting all aspects of both sales done within a month, so that grannie starts the month low-income and ends the month low-income. Another option is for grannie to set the house sale $ into a special needs trust that is Medicaid compliant. None of this is simple - really a Medicaid compliant SNT is not ever a DIY project - and really grannie should meet with an elder law atty before doing any of this.
? for you?
is the house completely owned by grannie? or are you part owner and all the recorded legal at the courthouse shows you as part owner and since when?
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Are you her caregiver? and have been her caregiver full-time for at least 2 years?
If so, carefully & clearly speak with the atty as to just how your state does the MERP - estate recovery exemptions and exclusions for family caregivers regarding you inheriting the house (if that is what grannie has as per her will).
Also try to get a realistic idea of what the house is worth. The 100K is that what the tax assessor has for value? if so, it may not be accurate as to what the house can realistically sell for especially is grannies house has delayed maintenance and there are tear-down/rebuilds in her neighborhood which affects all property values to go higher. Medicaid is pretty much a stickler for FMV on property. It could be worth getting house appraised to find out a more accurate value.