Health First Colorado, which is the Medicaid program for the state, provides very important benefits for those who need extensive support as they age. Medicaid or Health First Colorado will pay for nursing home care while Medicare will not, for example.
Planning before someone applies for benefits is very important, as the state can impose penalties when someone applies and also may initiate recovery efforts against someone’s estate after they die. The home where you live won’t prevent you from getting Medicaid benefits, but it will be subject to recovery claims after your death.
There are typically three situations in which the state may defer or eliminate estate recovery efforts in your case.
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When you had live-in family support
If one of your siblings or your children were to move into your home with you and care for you as your health fails, they could potentially stay in the home even after you move into a nursing home facility.
If a sibling lives with you to help you and then continues living in the property after you go to a nursing home, they can exempt the home from recovery efforts if they lived with you for at least a full year before you move to the nursing home.
If your children are the ones who lived with you and then assumed possession of your home when you moved to the nursing home, they typically need to have lived with you for at least 2 years before you move to the nursing home to exempt the property from recovery efforts.
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When you have specific family members living with you
If you have a surviving spouse who lives with you, the state will usually defer or not pursue recovery efforts. The same may be true if you have a minor child that lives with you or if you have an adult dependent who is blind or suffers from a permanent disability. Given that those people rely on the home as their primary residence, Medicaid will typically not try to make a claim against the property.
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When recovery would cause undue hardship
Sometimes, the loss of real estate could pose a massive issue for surviving family members. If the heirs of the benefit recipient can make a reasonable claim for undue hardship, they could potentially prevent estate recovery efforts against the home.
Rather than trying to fit into very restrictive rules for exceptions, it may be a better approach to plan ahead and protect assets from recovery efforts. Learning more about Health First Colorado and elder law will help those preparing for retirement.