Doug – Texas: My mother is 89 and, due to an injury, will not be going home, but into an assisted-living facility. We want to give her home to her oldest son but hear that she would lose her Medicare for 60 months. This makes no sense to me. The home is likely only worth $50,000 to $70,000. Why can she not gift or sell cheaply her home without Uncle Sam kicking her?
Phil Moeller: Your note says she would lose her Medicare, but I think what’s at stake here is whether she would lose her eligibility for Medicaid. Medicare does not cover assisted living, but Medicaid does. States pay a substantial share of Medicaid expenses and require income and assets tests to qualify. Giving away your mother’s home looks at first glance as an effort to hide assets from Medicaid, which normally uses what’s called a five-year lookback period that would apply asset sales during this period to boost personal wealth and possibly render a person ineligible for Medicaid. You should be able to get help from the State Health Insurance Assistance Program (SHIP). It provides free counseling and should have someone in a Texas office who can help you understand local Medicaid rules.