They want to sell me the apartment they were living in and is payed for. They will act as the lender with me paying them a monthly sum. Is this something that could cause them to lose their Medicare benefits if they were to need LTC in the near future (before the 5 year look back)?
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MedicARE is primarily about paying for hospitalization and meds, and has several parts A-D.Everybody pays into Medicare through payroll and basically everybody gets qualified into Medicare when you turn 65 & retire. Medicare is federally run.
MedicAID is a federal/state needs based entitlement program (and very different than how Medicare & SS are done as they are federally structured entitlement programs).Because MedicAID is needs based, what was done with assets in the 5 yr window prior to Medicaid application is central to qualifying. Medicaid is designed as a safety-net for low income who can show BOTH financial and medical necessity for long term care. The monthly asset ceiling, administration and how assets are dealt with after death is set by each state & each state's laws.
Because MedicAID is needs-based, doing a 5 yr look-back on the applicants assets is critical for the states to operate the program. If everyone was able to transfer all of our parents assets, empty out their accounts today, spend their monthly retirement and SS on nonLTC/NH stuff and put them into LTC/NH tomorrow, paid 100% by the state the system couldn't afford it and they wouldn't have any NH to go to.
MedicAID compliance is all about either doing planning OR spending your share until they are at the state assets ceiling OR unless you are impoverished.
Yep, it's confusing.
Now IMHO the issue is how will your parents pay for LTC if they should need it;
what is their current health situation; their financial situation;and what do you kinda anticipate the next 5 years will be for their needs. If they are 80 & 82 with no real chronic diseases it's different scenario than if they are 90 & 92 with Parkinson's.
If you think they are way off to need LTC - like 2017 - then they can sell you the condo for a nominal amount and you would be outside of the 5 yr lookback. Or they can sell you the condo for whatever is the County tax assessor value or a current real estate comparable rate and it's all nice an legal and can pass the Medicaid review sniff test next year. Otherwise Medicaid will impose a penalty. How the penalty is done is different in each state - it's a % of the state's NH costs and so varies yearly and by each state's costs & reimbursement. Yep, more confusion. If you & your parents haven't met with an elder care attorney to have DPOA; MPOA, etc done, then find one to get all that paperwork done and discuss the sale of the condo. Each state's laws are different and each county has it's own twist to things, so you really are served best by someone who practices in the county where the the property is located. Good luck.
Keep in mind the lookback for Medicaid eligibility is 5 years. If you think that will be needed to pay for their care, then you should gear your decisions to be Medicaid compliant asset level by 2016
Here are two articles that deal with an elders home and Medicare. These might be able to help you with your money and legal question on Medicare and home sale. I would check with the Medicare department to make sure you will be fine in the future.
Can Medicaid Take Mom's House to Pay the Nursing Home?
https://www.agingcare.com/articles/can-medicaid-take-your-house-147803.htm
Assets You Can Have to Still Qualify for Medicaid
https://www.agingcare.com/articles/asset-limits-to-qualify-for-medicaid-141681.htm
Best of Luck,
Karie H.
AgingCare.com Team
I hope this helps,
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