Ohio Medicaid Changes Rules Regarding House Exemption

Some recent changes to the Ohio Medicaid program may have escaped your notice at the time they took effect, but you should take notice if you or a loved one receives Medicaid in an Ohio nursing home or assisted living facility.

The changes involve financial eligibility for Medicaid, and are collectively billed as the “Ohio Disability Determination Redesign." First the good news: an individual applying for Medicaid under the redesign can retain resources up to $2000, a $500 increase from the previous limit of $1500. However, this small positive is dwarfed by changes to real property rules under the redesign.

How Real Estate Ownership Now Affects Ohio Medicaid Eligibility

Unfortunately, changes to the program involving real estate are not as favorable for Ohio Medicaid recipients and applicants. As before the change in the law, the primary residence is still exempt from being considered a "countable asset" for Medicaid when a recipient receiving long-term care is married and the other spouse (also known as the "community spouse") remains in the home. Real estate aside from the married recipient's residence, such as a vacation home, would be exempt from countable assets under the old law for the purpose of determining Medicaid eligibility, but only if the property was immediately listed for sale with a real estate agent or broker.

For Medicaid applicants without a community spouse, the residence was exempt from being counted for thirteen months. After thirteen months, the residence had to be sold and the proceeds of the sale had to be "spent down" for care until the applicant met Medicaid's asset eligibility limit.

Under the change in law, while a community spouse is still eligible to remain in the residence, and the residence is not a countable asset, other real estate no longer has an exemption, even if a broker or real estate agent has listed it for sale. Furthermore, the thirteen month period of exemption for a residence (for applicants without a community spouse) has been eliminated. Under the new law, the only way to exempt a residence from being a countable resource is for the Medicaid applicant to sign a sworn statement stating that it is their intent to return home after their temporary stay in the nursing home or assisted living facility.

What the Changes Mean for Your Medicaid Planning

If you are looking to preserve real estate or its value for your family, including adult children, there are some options available to you. If you do not have a spouse, you may be able to transfer the home to a sibling who has an equity interest in the property.

Similarly, if your adult child resided with you in the home for at least two years and provided you with care services that enabled you to delay entering a long-term care facility, the child caretaker exception may allow you to transfer the home to them.

An elder law attorney can review other options with you if neither of these scenarios apply. Even if you don't currently expect to need Medicaid assistance, the likelihood that you may need it down the road is significant. The earlier you can plan to preserve assets, the better, especially given this recent change in Ohio law.

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