My grandmother is 97 yrs old and was recently hospitalized for paralysis of her esophagus. She can no longer eat by mouth and is fed through a feeding tube. She has other heath issues such as suffering from dementia, being confined to a wheelchair and heart issues that requires her to have a pacemaker. After she left the hospital she was sent to a rehabilitation facility to recuperate. She can't return home without 24hr care, but there is no money for nursing home or in-home care. My grandmother does receive social security and gets a retirement check, however this is not enough to cover the monthly expenses that are needed for her care. She owns a home that isn't paid off, but it hasn't been kept up and is un-rentable and in my opinion un-sellable. The social worker at her rehab said to just let the home go in to foreclosure, but I don't agree with that guidance. Is there any protection for her home? What should I do in order to get her on the Medicaid waiver list? We live in the state of Maryland.
There's a lot of paperwork involved, but it's time. Your adult social services office will help you get started.
Take care,
Carol
Blessings
Bridget
60-70% of all NH is paid by Medicaid. So you are not alone is applying for and going through the paperwork to get it for her. Medicaid, although it is a federal program, it individually administered by each state. So how Maryland does it will be similar yet different than Texas - this will be important regarding her home. Most NH admissions or social service dept will have the specifics for your state. In general most states have the max monthly total asset of 2K (her home and car is excluded from the asset list). Over that you need to start to “spend down” $.
“Spend down” – means get assets (excluding homestead & car) under the state’s Medicaid asset ceiling. They can buy funeral and burial policy, life insurance (irrevocable NCV). Glasses, dental care (spotty on Medicaid), hearing aids, walkers. If they have a home, prepay for utilities, cable, insurance, repairs. No $ gifted to others. Everything must be for their care or their property. Medicaid look back is 5 years. The state can go thru 5 years of bank records & also require receipts to any item that pique’s their interest.
Regarding the house she owns. Owning a house isn't a asset that can be counted to get Medicaid when she is alive. Once she dies then the house then becomes an issue through Medicaid recovery. Under Medicaid, each state is required to have in place a Medicaid Estate Recovery Program (MERP). MERP comes into play after the Medicaid recipient has died and their estate is being settled usually by going through probate and property they owned needs to be distributed as per the will in probate. How each state does probate is important as that determines whether for MERP the house is a "lein" or a "claim" against the estate and also how your state's laws are written determine the classifications of debt and the order they get paid.
For example, my mom is on Medicaid, she lives in Texas and still has her "homestead" although she is in a NH, we do an annual "wish to return" letter. TX MERP is pretty line-item specific. When she went into the NH, we were given paperwork that tells us about MERP. I, as POA, did not need to sign approval for this, as it is state law based on federal mandate and you do not have the option of not going through MERP after death if they are on Medicaid since 2005. In Texas, MERP is a class 7 claim against the estate. Which means there are 6 other classes of debts that must be paid first. But before probate, MERP has to evaluate even filing a claim (is the house worth going after). MERP notification letter is automatic but MERP recovery is an evaluated decision for cost-effectiveness. However, I will be filing my own account receivable (AR) claim with Texas MERP after death.
Remember once they are in a NH there is no $ as ALL money less personal needs allowance is paid to NH. Someone else needs to pay for everything for moms empty house. Who paid insurance, taxes, yard work, other stuff? Who pays the mortgage? In Texas, anyone who paid any of those things on the home can file for recoup (AR) of their $, which will be deducted from the MERP total. MERP needs to get a letter from anyone who is going to file a AR claim. So if you paid taxes, insurance; SIL paid utilities, cable; & nephew paid yard work & mortgage, all 3 of you each have a AR claim with MERP.It may be that your claims are more than the cost of MERP to go through recovery. All these are state specific, so you need to find out what's what for Maryland.
It may make sense for someone in the family to pay the mortgage and then file for recovery of that $ against MERP if Maryland does that. Whatever the case, all these issues are sticky, you'll need to hire an experienced lawyer to help. To begin your search for the best lawyer for the job, contact the local bar association and ask whether it has a lawyer referral service that includes those who specialize in elder law. You can also contact the National Academy of Elder Law Attorneys for a referral to its members in your area. Good luck.
IMHO keeping a negative equity home makes sense if you can afford to make the monthly payment and have the long-term ability & reason to stay/pay (like you live in the home, you work in the area) and you can wait for housing prices to rise and the L2V% isn't too crazy. But for an ill, 97 yr old that isn't the case.
If you have a loan-to-value ratios greater than 100% then you have an incentive to default and go to foreclosure even if you can afford their monthly payments, if you are at 120% ratio or higher you'd be silly to pay the mortgage as you will never get your $ out within the lifetime of the mortgage IMHO. You're better off walking away, renting & save probably a substantial sum of $$ until house prices stop declining. If milan301 & her family have no $ to bring the mortgage current then there is no good other option. I would imagine the SW has seen enough applications to know that old folks homes with years of deferred maintenance & a mortgage are going to be a glitch in the paperwork so a default makes sense. It also could be that the SW knows that there are going to be expenses that someone is going to have to pay and the home will end up getting liens on it for unpaid health care bills, so the house will end up a muddle of problems or the county's value of the home will keep her from getting aid from the state as the tax assessor value on the property doesn't take in account deferred maintenance issues or mortgage situation.
I'm going to digress a bit..the property value is the sort of thing, no-one tells you to be concerned about but it really matters for the elderly especially if they will need to apply for Medicaid.When you get your tax bill you have X # of days to challenge the value. If you don't then it is set a the new rate. Back in the go-go real estate years, homes that our parents paid modest amount for in the 1950/60's were now worth 200 - 600K. They didn't challenge it as their taxes were frozen for being over 65 and they were so proud of how much $ the house was worth. But now they need Medicaid and they have a home "worth" 525K and cannot get Medicaid as their home is worth too much for Medicaid (500K in most states) and has to be sold. Or it's 300K and they go on Medicaid, and then MERP has the house @ 300K value but the reality is that it is worth maybe half that. So that is going to be
a muddle to deal with when they die and you divide out her estate. You cannot start planning early enough on all this.