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Will I Lose My House if I Apply for Oklahoma’s Medicaid Long Term Care?

Feb 18, 2021

The answer is yes, no, or possibly. Your house is normally your most valuable
possession full of memories, hard work, and life. Unfortunately, medical conditions
prevent many elderly Americans from continuing to live independently in their homes.
Many of them are forced to relocate to long-term nursing facilities. Nursing facilities
are costly, and most Americans cannot afford this type of care without government
assistance. Many are on the cusp of affording long-term care but find that their income
or resources exceed the limits required for eligibility.
Medicaid Long Term Care (LTC) is a Federal and State insurance program used to
cover nursing long-term care for certain low-income eligible Americans. Medicaid is not
to be confused with Medicare, which is a Federal health insurance program for all
Americans 65 years old and older, which may require a premium payment. SoonerCare
is Oklahoma’s Medicaid. In this article, I will be briefly discussing Medicaid LTC as it
relates to full-time nursing facilities and our elderly Americans. Please note that
Medicaid is complex and this article will not cover all aspects of Medicaid but is meant
as a brief overview of eligibility and considerations as planning for your future.
To be eligible for Medicaid LTC, the applicant must be medically and financially eligible.
The three basic categories of medical eligibility are elderly, blind, or disabled, this article
will focus on the elderly, which is defined as 65 years and older. If an LTC applicant is 65
years or older, they meet the medical eligibility, but they must meet the financial
eligibility too. Medicaid LTC financial eligibility refers to income limits and resource
limits. In Oklahoma, a single individual’s income limit cannot exceed $2,382.00 dollars
per month and their resource limits cannot exceed $2000.00 dollars. See OAC 317:35-
19-21& www.okdhs.org Appendix C-1. Resources refer essentially to non-income
producing assets such as lots, land, houses, vehicles, boats, savings, life insurance, &
etc. See OAC 317:35-5-41.1-3 If an elderly American has resources that exceed the
$2000.00 dollar limit, they can spend down those assets to become eligible for Medicaid
LTC. Spending down resources is a process of depleting resources to the $2000.00
dollar limit to become eligible for LTC. But one must be aware of the “5-Year Look Back”
period. This 5-year look-back period prevents elderly Americans from giving or selling
resources away below fair market value 5 years prior to applying for Medicaid LTC. See
OAC 317:35-19-20(5).
A common scenario is Ms. Bobby Sue Smith (a fictitious person used in this scenario),
who lives in Fort Gibson, Oklahoma. Unfortunately, Ms. Smith lost her husband, Leroy,
two years ago. She is 82 years old and has been in the hospital for the past two months
but is being released now requiring full-time care. Ms. Smith has two adult daughters,
Beth and Pam. Beth lives in Tulsa, Oklahoma and Pam lives in Chicago, Illinois. Ms.
Smith and her daughters agree that a long-term care nursing facility is the best option at
this time. Ms. Smith receives $2200.00 dollars per month in social security benefits,
owns a 10-year-old Chevy truck and a home on two acres, which is valued at
$99,500.00 dollars, where she and Leroy raised Beth and Pam.

Clearly, Ms. Smith meets the medical eligibility for Medicaid LTC because she is over
65 years of age. Ms. Smith must also meet the resources limit. Ms. Smith’s home and
two acres are valued at $99,500.00 dollars and she owns a vehicle worth a $2000.00
dollars. Ms. Smith does not meet the resources eligibility at this point unless, she
spends down her resources. Resource eligibility is $2000.00 dollars and Ms. Smith has
resources worth $101,500.00 dollars. So what are Ms. Smith’s options? She must
spend down her resources, but Ms. Smith and her daughters do not want to lose the
family home where she and Leroy raised their two daughters, Pam and Beth. Without
spending down her resources below $2000.00 dollars, Ms. Smith is not eligible for
Medicaid LTC. Considering the 5-year look back period, Ms. Smith cannot give the
home to one or both of her daughters, because that is below the fair market value and
she would be penalized and not eligible for Medicaid LTC.
Ms. Smith has a few options, first if she and her daughters have the reasonable intent
for her to return home within 12 months of applying for LTC, she can make her intent
clear to the Oklahoma Health Care Authority (OHCA) and sign an acknowledgment of
intent to return home, DHS Form 08MA010E; thereby, keeping her home until the 12
months have lapsed. See OAC 317:35-5-41.8 However, if she cannot return home
following 12 months in LTC, OHCA can file a lien on her home for repayment of
Medicaid LTC. Secondly, Ms. Smith could sell her home to her daughters for the fair
market value keeping the family home in the family, but she would be required to use
the proceeds to pay for LTC. Other exceptions that could allow Ms. Smith to keep her
home, include but are not limited to; one of her children under 21 years old resides in
the home, a disabled child resides in the home, or one of her daughters has been living
in the home and helping her the two years prior to Ms. Smith applying for LTC and still
resides in the home. Id. The bottom line is that Ms. Smith must have the intent to return
home within 12 months to keep the home, but following the 12 month period, if Ms.
Smith is still in LTC, she will eventually lose the family home. Ms. Smith could have
avoided losing her family home and still receive Medicaid LTC if she had planned
ahead.
Estate planning is a valuable tool that Ms. Smith and her daughters could have utilized
prior to Ms. Smith’s necessity for LTC that could have preserved and saved Ms. Smith’s
family home and resources. Attorneys understand the processes and can help elderly
Americans and their families prepare and be ready for LTC and prevent the dilemma
Ms. Smith is currently facing.
In conclusion, Medicaid Long Term Care is a federal program regulated by the
individual states for long term care for elderly Americans who meet the medial eligibility,
of 65 years or older and who meet the financial eligibility, meaning that they do not have
monthly income that exceeds $2382.00 dollars and their resources do not exceed
$2000.00 dollars. If an elderly American is ineligible in either income or resources, they
must spend down their resources, keeping the 5-year look back period in mind, to the
eligible limit to receive Medicaid LTC.

Note that this is a brief overview of a complex Medicaid program. I used a common
scenario as a method to explain a particular situation, but there are numerous scenarios
and situations that can change the analysis. For more information about this topic and
more estate planning options in Oklahoma, feel free to contact James M. Green
Attorney At Law at (918) 448-9104, james@jamesmgreenlaw.com or visit our website at
www.jamesmgreenlaw.com.

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