When we speak to groups, we get this question a lot: “I took care of Mom, so she can give me her house now that she needs a nursing home, right?”
Maybe. Let us explain.
Medicaid is the system that will pay for a person’s nursing home if she does not have the funds to pay for herself. A person cannot give her assets away and then get Medicaid soon. Instead, Medicaid has what is called a look-back period. If you give away assets within five years of applying for Medicaid, Medicaid will deny your application for a period of time: For every $270.16 given away in the five years before applying for Medicaid, Medicaid will not pay for the nursing home for one day. (The amount is a little higher in Indiana.) This amounts to Medicaid not paying for the nursing home for one month for every $6,000 gifted, approximately. What’s even harsher is that the penalty period does not start to run until the person is otherwise eligible for Medicaid. For a single individual, that is when they have less than $2,000 in countable assets.
There are some exceptions to the look-back rules, including the caregiver child exception. If a child has served as a caregiver for the parent who is now in a nursing home, the parent may be able to deed their home to the child with no penalty.
To qualify, the caregiving child had to live in the parent’s home for at least two years immediately before the parent went into the nursing home. During that two-year period, the child had to provide care to the parent such that, had he not provided care, the parent would have needed a nursing home at least two years sooner. Sufficient proof must be submitted to Medicaid.
A child may also qualify as a caregiver child if the parent needs home care either in Indiana or Kentucky, or assisted living in Indiana.