If we put our mother in a nursing home, and her only asset is her home, how will we afford to pay for her care?

If you have assets under $2,500, and reside in a nursing home, the State of Maryland through Medical Assistance (Medicaid) will pay the nursing home. However, a house that is a person’s primary residence is exempt for purposes of Medicaid eligibility provided that the community spouse is still residing in the house, and the net value of the house does not exceed $500,000. Additionally, if you are a single, then sign the application that you have an “intent to return to the house,” even if that it’s impossible and you remain in a nursing home. The home is an exempt asset for 6 months.

Also, any real estate, including the primary residence, is exempt if you are legitimately trying to sell the property, and it is not selling. For example, you own 10 acres of undeveloped land in Arizona, it’s been on the market for 6 years the property is exempt.

However, when the owner of the property dies, Medicaid requires reimbursement. This is called estate recovery.  Usually this happens by using the proceeds from the sale of the house, as the State of Maryland will place a lien on the house when the owner becomes eligible for Medicaid. This protects the state’s ability to get reimbursed when the house sells.

But if you sell the property, there are ways of saving some of the assets from Medicaid.