Home Value Cap for Medicaid Could Be Raised

By Jackie Jadrnak

Jun. 7, 2008 (McClatchy-Tribune Regional News delivered by Newstex)

-- SANTA FE -- How much equity can you have in your home and still get Medicaid to pay for nursing home or other long-term care?

The state Human Services Department is trying to come up with an answer. The federal government says the line should be drawn at $500,000, but states have the option to increase it to $750,000.

It's an emotional issue, with families often reluctant to part with a longtime home, but sometimes forced to sell it to pay for an aging or disabled loved one's care. Also, the person needing care might hold the hope that he or she can get better and return home.

The question doesn't even arise if a spouse, minor child or disabled child is living in the home. Then it doesn't count toward the limit on assets to qualify for Medicaid.

At the same time, taxpayers might question why they should foot the bill for people who have a half-million dollars or more available in a house that eventually will enrich their heirs.

Remember, what's being counted here is equity -- it subtracts out any mortgage or money still owed, but it also is based on the current value of the home, not the price you paid for it.

That means current real estate prices -- which have ballooned for a long time but now may be slipping -- further complicate the picture.

A family may have purchased or inherited a modest home in the low six figures, or even five figures, a few decades ago in a popular area such as Santa Fe only to see values skyrocket around them.

Another issue: Some people have a Medicaid waiver to get long-term care services in their own homes. If their equity in their home disqualifies them for Medicaid, they might have to sell it and go to a nursing home.

The state already has a $500,000 cap in place but will formalize it through a new regulation, tightening up how the limit is applied.

Human Services Secretary Pamela Hyde said the department also will consider raising the cap to $750,000, based on comment it gets from the public.

She said she doesn't know what it would cost the state in additional Medicaid spending if it raised the ceiling -- or if any money would be saved by keeping it lower.

What about elderly parents who anticipate needing nursing home care and transfer their assets to their children?

Medicaid, which used to look back three years to consider if such "gifts" should be allowed, will now consider transfers made in the previous five years.

Medicaid cap hearing

A public hearing on the regulation is set for 9 a.m. Friday at the Toney Anaya Building, 2550 Cerrillos Road, Santa Fe.

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