Early in my career as an elder law attorney, I attended a talk given by the administrator of a local nursing home. This happened over 30 years ago, but I remember it well. Some events just stick in your mind.
The subject of the talk was what you should expect when you enter a nursing home. At the end of the presentation, the administrator took questions. One audience member raised her hand and asked an important question – “what happens to my home when I run out of money to pay for my care? Will I have to turn it over to the nursing home?”
The administrator answered by saying that when you use up your savings, you have to sell your home to pay for your care. As a young attorney who had spent a lot of time studying the laws related to paying for nursing home care, I knew that the administrator’s answer was wrong. When you exhaust your ability to pay the full cost of the nursing home, Medicaid will step in and pay for your care. You don’t have to sell your home. Medicaid rules allow you to keep your home.
I also understood that it was to the nursing home’s advantage for people to sell their homes to pay for their care rather than go on Medicaid. That is because nursing homes charge residents who pay privately more than they can charge once the resident goes on Medicaid. So, to maximize its profits a nursing home will usually want to have as many “private pay” residents as possible.
The nursing home and its residents have a fundamental conflict of financial interest. Yet, most nursing home residents and their families rely on the nursing home for advice about payment rules and Medicaid. I felt it was important that seniors at the talk knew that the law protected their homes when they entered a nursing home, so I raised my hand.
When the administrator called on me I stood up and said that I thought that her answer to the question of what happens to your home when you run out of money was not entirely correct. (I was trying to be tactful). I said that the law provides that you can retain ownership of the property where you resided when you entered the nursing home and still be eligible for Medicaid assistance to pay the cost of your nursing home care. The administrator gave me one of those “looks that can kill” and moved on to the next question. After the meeting ended she came over to me and said, “Look Sonny, we are trying to run a business here. Don’t you be attending any more of my meetings!”
Fair enough. I did not attend any more of her meetings. But I did start setting up public presentations on my own so that I could explain the payment rules to seniors and their family members. I didn’t want people to have to rely solely on the information they got from the nursing home. And I’m proud to say that over the years I was been able to protect the homes of many residents of that administrator’s nursing home.
I have to be careful here because I think that these days most nursing home employees do try to do the right thing and provide people with as accurate information as they can. But nursing home administrators, admission directors, and business office managers are not lawyers – you can’t expect them to fully understand the laws that protect the home and other resources of their residents. In fact, some of the better nursing homes recognize this and recommend that their residents meet with an elder law attorney to discuss payment options and Medicaid rules.
But many families still try to “go it alone” with only the limited direction they get from the nursing home to guide them. They need to be aware of the nursing home’s conflict of interest: the longer a resident is in private pay status rather than on Medicaid, the more profit for the nursing home. Smart consumers don’t rely solely on the nursing home for information about paying the cost of care. They get advice about their rights and options from an expert elder law attorney who is working just for them.
In 1985, when I attended the administrator’s talk, the average cost of a month in a nursing home was under $1,400. Today the average cost in Pennsylvania has soared to over $9,000 a month. Few families can afford to bear that kind of cost for long. Most long term nursing home residents eventually go on Medicaid. They need to know that their home is still protected: they can keep it by filing the right paperwork with the Medicaid office and getting Medicaid assistance to help pay for their care sooner rather than later.
Unfortunately, the protection of your home is not quite as good as it was in 1985. In 1994 a new law called Medicaid Estate Recovery came into effect that can force the sale of your home after your death in order to reimburse Medicaid.
Estate Recovery applies if you get Medicaid funded long term care services in a nursing home. It also applies if you get Medicaid help with long term care at home through the Aging Waiver or LIFE programs. Pennsylvania’s Estate Recovery Department recovers tens of millions of dollars every year, mostly from the sale of homes, so this is a real concern.
There are ways to plan in advance to avoid Estate Recovery. If you want to protect your home for your family, planning with an expert elder law attorney is critically important. The sooner you start that planning, the better your family’s chances.
If you or a family member needs long term care or may need it in the next five to seven years and resides in Pennsylvania, you can get up to date advice and guidance from the lawyers at Marshall, Parker and Weber. We will show you how to protect your home from loss to health related costs during your life and from Estate Recovery after your death.
