Money Monday: Can Medicaid take your house if you enter long-term care in Oklahoma?

Many Oklahomans worry about what happens to their assets if they need long-term care. On this week’s Money Monday, financial advisor Paul Hood explained how Medicaid works when it comes to paying for nursing facilities — and whether your home and savings are at risk.

Medicaid and long-term care

“Medicaid is basically, and I don’t want to sound bad, but it’s welfare for when you’re older and you need long-term care because most health insurance, Medicare, does not pay for anything beyond about 100 days,” Hood said.

“So if you have to go into a facility, then the state, funded some by the federal government, will assist and pay. Now, as you might guess, they’re not bad facilities, but if you’re paying your own way, you can pick a nicer facility.”

Can Medicaid take your assets?

Hood said one of the most common questions he hears is whether people can move a house or other assets out of their name to avoid losing them.

“A lot of times I get asked, you know, how can we do this? Can we move mom’s house out of her name? Can we do these things? And I don’t want anybody to get mad at me, but it’s a little selfish. Because mom and dad created that, and kids are worried about them getting their inheritance instead of mom or dad having that facility.”

What about a surviving spouse?

Hood said planning becomes even more critical when one spouse needs care while the other still lives at home.

“Where it does come into play is if you do have a married couple, and let’s say one of them has a big IRA… Medicaid will make them spend that down before they’ll provide any help. Well then what about the surviving spouse? So we get involved a lot with the surviving spouse planning. And there’s things you can do.”

Medicaid’s “look back” rule

Families considering asset transfers should be aware of strict rules, Hood said.

“The thing that people have to understand is there’s a look back that says if you moved assets out of your name, and sometimes it’s three, sometimes it’s five years, they can go back and claim those assets. So if they have to pay for care, and beyond what mom could do or dad could do, they can go back and trace those assets back of anything within the last three to five years.”

Plan ahead

Ultimately, Hood advised families to think long-term.

“Yes, the answer, the basic answer is yes, Medicaid can come in and make them do some stuff,” Hood said.