Medicaid Rules Can Protect
Elderly Parent's Home for
an Adult Caregiver Child

Many older people with serious health problems face the loss of their homes because they did not properly transfer their property before they entered the nursing home.

An improper transfer made within five years of applying for "institutional" Medicaid can cause a person not to be eligible for Medicaid programs or payments.

People still may be able to get Medicaid for nursing home care even if they do not properly transfer their homes. A special rule applies where an adult child has lived in the home and cared for her/his parent for two years prior to the parent applying for Medicaid.

Under this rule the state saves money when older people are able to stay in their homes longer. By staying with the elderly parent, the adult child caregiver delays their parent's entering a nursing home for two or more years saving the state a lot of money. In return, the caregiver child is allowed to stay in the home when the parent goes to the nursing home.

This rule applies only to an adult child of the parent and not to other relatives or friends who might care for this person.

To use this rule the adult child has to show that the rule applies. It can be hard to do this. Here are some of the problems:

• There has to be a doctor who treated the parent for at least two years before the nursing home placement. The doctor must know about and be willing to document the parent's level of functioning, medications, and medical problems at the beginning of the two-year period of care in the home.
• If there is a mortgage on the property, usually the loan agreement will require notification to and prior approval of the lender prior to the transfer.
• The adult child will need to have the means to pay the mortgage and maintain the property.
• The transfer will not be valid unless the homeowner has the capacity to sign a deed or he or she previously executed a durable general power of attorney giving another person the necessary powers to transfer real estate.
• If the homeowner lacks capacity or never executed a power of attorney with the necessary terminology, legally transferring the property will be much more difficult, if not impossible.

So, what can be done? An adult child who chooses to live with the parent and provide care should plan ahead to avoid this situation.

• If the parent has capacity and agrees with the property transfer, the importance of a valid power of attorney should be explained and prepared.
• The parent should also authorize the child to have access to the medical records, and the child should obtain reports on the parent's status and care needs when the period of care giving and residence in the home begins.
• If the homeowner changes health care providers during the two-year period preceding nursing home placement, the complete medical record should be transferred to the new physician.
• Care should be taken to insure that the elderly parent's physicians understand the situation and keep good records about the parent's condition so that the level of care forms can be accurately completed based on the parent's past records.

Parents and adult children who are faced with this situation should consult with an attorney experienced in dealing with Medicaid and legal problems of the elderly.

This article was written by Sandra J. Buzney, J.D., LISW, Shareholder, Hickman & Lowder Co., L.P.A.. It is reprinted with permission from The Alert, a publication of The Legal Aid Society of Cleveland.