Qualifying for long-term care Medicaid can be tricky. There are strict asset and income limits. Elder law attorneys help clients get qualified for Medicaid using variety of strategies. Some of these strategies revolve around how to plan for the client’s home.

In most states, the home is an exempt asset if the client has an intent to return home. The home is also exempt if there is a community spouse, disabled or blind child, or child under the age of 21 still living in the home. However, planning is still sometimes sought in these situations to avoid estate recovery.

One planning technique is to transfer the home to a child caretaker. This planning strategy is the result of 42 U.S.C. § 1396p(c)(2), which states:

42 U.S. Code § 1396p(c)(2):

“(2)An individual shall not be ineligible for medical assistance by reason of paragraph (1) to the extent that—

(A)the assets transferred were a home and title to the home was transferred to—

                …

(iv)a son or daughter of such individual (other than a child described in clause (ii)) who was residing in such individual’s home for a period of at least two years immediately before the date the individual becomes an institutionalized individual, and who (as determined by the State) provided care to such individual which permitted such individual to reside at home rather than in such an institution or facility;”

Former President Trump made it very clear during his presidency that he supported Medicaid work requirements. Indeed, the former Administrator for Centers for Medicare & Medicaid Services (CMS), Seema Verma, under Trump’s administration, issued policy memoranda on how states could submit Section 1115 waivers in search of work requirement approval.

Thereafter, several states submitted such waivers, including Arkansas, Arizona, Iowa, Indiana, New Hampshire, Kentucky, Kansas, Maine, North Carolina, Mississippi, Ohio, Utah, Oklahoma, and Wisconsin. Kentucky was the first to attempt to implement such work requirements. Under that waiver program, each Medicaid recipient would be required to work, look for work, or participate in volunteer work for 80 hours each month. If the requirement wasn’t met, Medicaid coverage would be lost for 6 months. There were several exceptions to the rule, such as for pregnant women, full-time students, primary caregivers to dependents, the elderly, and the disabled.

Federal law demands that states attempt to recover amounts expended on certain beneficiaries receiving Medicaid benefits. (See 42 U.S. Code § 1396p(b)) Namely, a state must attempt estate recovery for individuals who were aged 55 and up when they received benefits to pay for nursing home care, home and community-based services, and related hospital and prescription drug services.

Federal law defines estate as “all real and personal property and other assets included within the individual’s estate, as defined for purposes of State probate law.” However, the definition goes on to say that each state may pass laws to widen this definition, to include “any other real and personal property and other assets in which the individual had any legal title or interest at the time of death (to the extent of such interest), including such assets conveyed to a survivor, heir, or assign of the deceased individual through joint tenancy, tenancy in common, survivorship, life estate, living trust, or other arrangement.” If a state has passed such a law, then that state has expanded estate recovery.