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Medicaid benefits later in life can put someone’s house at risk

On Behalf of | May 6, 2023 | Health Care Planning

Planning for retirement and also the support someone might need when they are older and medically vulnerable can be a challenge. Some people take for granted that Medicare will take care of their medical expenses, but not all older adults can count on full coverage from Medicare.

There are certain kinds of services that Medicare doesn’t cover, and older adults who require those services may need Medicaid benefits instead. In theory, qualifying for Medicaid is a difficult process, as it involves meeting a very strict standard for income limitations and also for the assets in someone’s name.

The one potentially valuable asset that typically will not prevent someone from qualifying for Medicaid coverage in Florida is their primary residence. Someone’s home equity won’t eliminate their eligibility for medical benefits if their income is low enough to qualify. However, their house could be at risk later after they receive benefits.

Medicaid will seek repayment for the benefits provided

Estate recovery programs are mandatory. The federal government requires that every state that receives Medicaid funds from the federal government seek repayments from beneficiaries when they die. Therefore, Florida has an estate recovery program. After someone dies, the state will make a claim for the full value of the benefits that covered their care against their estate. Any assets in someone’s name, including their home, could be at risk of claims by the Medicaid estate recovery program. The executor of someone’s estate may even have to sell their home to repay their debts rather than letting their children or other beneficiaries inherit the home.

Advance planning helps people get necessary medical support

Those thinking about their comfort during retirement and their legacy after they die can add long-term care planning or elder law matters to their escape planning agenda. Medicaid planning involves helping someone structure their retirement so that they can quickly qualify if they ever need benefits and protect certain assets so that they won’t be vulnerable to estate recovery efforts later.

Recognizing that certain property could be vulnerable after someone applies for Medicaid can help people better address their healthcare planning needs early in retirement or in anticipation of retirement.