If you own property or had your name removed from property and you have to go into a nursing home, the government will take the property?

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If you own property or had your name removed from property and you have to go into a nursing home, the government will take the property?

Is this true? Is there a certain number of years your name must be off a property in order to be “safe”? Can you purchase a property and have the mortgage in your name but put the deed in an adult child’s name? Can this property be taken away if you go into a nursing home?

Asked on January 18, 2012 under Estate Planning, New York

Answers:

Joseph Gasparrini

Answered 9 years ago | Contributor

The statement that the government will take the property if you go into a nursing home is not true.  To clear up some misconceptions about paying nursing home costs and government benefits and related questions, you must start with a few basic facts: 

1. Medicare does not cover the cost of a long-term stay in a nursing home.  if you go into a nursing home.  Medciare only covers certain short-term stays in a nursing home, such as a limited number of days after a person is discharged from a hospital and goes straight to the nursing home. 

2. Most people do not have private long-term care insurance, which is a special policy that provides coverage for nursing home expenses and other long-term care expenses that are not covered by Medicare.

3. Because of points 1 and 2 above, most people who are admitted to a nursing home will have no alternative but to pay the cost out of their own resources.

You are probably aware that many people in nursing homes are not paying the cost out of their own resources.  The reason is not that nursing homes offer free care.  The people in nursing homes who are not paying with their own resources are those who do not have any resources.  In other words, they are indigent.  The federal and state government jointly fund a program called Medicaid (not to be confused with Medicare), which will pay nursing home costs for indigent people.  But Medicaid will not pay the nursing home costs of someone who has sufficient financial resources to pay it themselves.  In many cases, a person with resources who goes into a nursing home will "spend down" their own money by paying the cost of the nursing home, until they have so little personal assets remaining that they qualify for Medicaid.  Thereafter, the Medicaid program (meaning, the government) pays the cost.  This brings us to the answer to your basic question: the "government" does not take the money of any nursing home patient.  In fact, it is almost the opposite: That patient spends his money by paying the nursing home bills.  Then the government (Medicaid program) begins to pay the bills for that patient who has run out of money.

Your questions about transferring assets to a family member involve very technical issues of Medicaid law and regulations.  They cannot be dealt with in a simple answer.  For those types of questions you should consult an attorney who is specialized or highly knowledgeable in the laws and regulations of Medicaid.


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