Medicaid says you cant sell your home what happens if you do?

Answer 1

Medicaid does not prohibit sales of homes or any other property. However, Medicaid does expect the seller to apply to his/her medical care the net proceeds of the sale, minus money spent for which the seller received "fair market value."

Answer 2

I should first note that I only practice in Florida. The rules/laws differ in each state. This answer only pertains to Florida medicaid law.

The initial concern is that, with Medicaid only allowing $2,000.00 worth of assets, selling any home will almost certainly bring the owner above the allowed-asset amount and, at first glance, seem to disqualify the homeowner from Medicaid. But at the same time, oftentimes the costs of maintaining a home (paying taxes, insurance, lawn mowing, repairs, utilities, etc...) become a burdensome expense (especially when my client is living in an ALF or skilled nursing facility).

We would treat this situation the way we would treat any client who comes to us with excess assets (and doesn't want to - or cannot - spend it all in order to have less than $2,000.00. Most of my clients come to me owning a home, and between $25,000.00 and $650,000.00 in excess resources - who want to preserve whatever they can to live a higher quality of life and not have to wait in order to qualify for Medicaid long-term care benefits (home care, ALF care, nursing home care).

For those who want to sell their home, our firm is able to put together, in advance of the home sale, a combination of strategies that will allow them to protect the proceeds from the real estate sale and qualify (or maintain eligibility) for Florida Medicaid. The protected proceeds can be used to pay for things that Medicaid wont (extra home care, paying a family member to provide care, providing entertainment, additional therapies, and other goods, products and services (needs or wants)).