How an “Intent to Return Home” Can Protect Your Home While Maintaining Medicaid Eligibility

Summary
To be financially eligible for Medicaid Long Term Care (LTC), an individual must be at or below asset and income limits for the Medicaid program for which they are applying. Often, the home is the most valuable asset, but an applicant’s primary residence will not be counted against their asset limit as long as the applicant, their spouse or another designated family member lives there. If none of those people are living in the home, an “intent to return” statement from the applicant can keep the home a non-counted asset for Medicaid Long Term Care eligibility purposes.

 

What Is Intent to Return Home

An intent to return home is a documented statement declaring that even though one is not currently living in their home, it is still considered their primary residence and given a change in their health situation, they will return to live there. Most commonly, the individual is residing in a nursing home when this statement is filed. Some states have standard intent to return home forms, but there is not a common form used for all 50 states. In general, it is a signed and dated letter or affidavit.

Intent to return home only applies to primary residences, and not vacation homes or any other property owned by the Medicaid applicant, which would all be considered countable assets. Condominiums, mobile homes and house boats can all qualify as a primary residence.

 

When and How Intent to Return Home Is Relevant to Medicaid LTC Applications and Benefits

Intent to return home is primarily associated with Nursing Home Medicaid, which is one of the three Medicaid Long Term Care programs. As the name implies, Nursing Home Medicaid will cover all costs associated with living and receiving care in an institutionalized nursing home, which means the Medicaid applicant will leave their primary residence to live in the nursing home. If no other qualifying family member (more on them below) is living in the primary residence, the equity interest of the residence (fair market value minus mortgage) will be counted against the applicant’s asset limit, unless the homeowner/Medicaid applicant files an intent to return home statement.

 Even if the individual is not likely to return to their primary residence, the intent to return home statement is still recognized in most states and maintains the non-countable status of the residence.

Intent to return home is used less often for the other two Medicaid Long Term Care programs – Home and Community Based Services (HCBS) Waivers and Aged Blind & Disabled (ABD) Medicaid – because in most of these cases the Medicaid applicant will still live in the home, which automatically makes it an exempt or non-countable asset. However, there are some unique situations where an HCBS or ABD Medicaid applicant is a homeowner, but happens to be living away from that home (with a family member or in an assisted living facility, for example) at the time of application. In these cases, the applicant could file an intent to return home in order to make their home a non-countable asset so they can qualify for Medicaid Long Term care benefits through the HCBS or ABD programs.

 

Intent to Return Home Exceptions

 

Qualifying Family Members

If any of the following applicant’s family members are still living in the home, it will be considered exempt from the asset limit even if the Medicaid Long Term Care applicant does not file an intent to return home:
– Spouse
– Minor child (under 21 years old)
– Blind and disabled child (any age)
– Sibling with equity interest in the home who has lived there are least 1 year immediately prior to the Medicaid applicant’s relocation to the nursing home (Sibling exemption)
– Adult child who has lived in the home, and been serving as a caregiver, for at least 2 years prior to the Medicaid applicant’s relocation to the nursing home (Child caregiver exemption)

As stated above, the home is also exempt if the Medicaid applicant will remain in the home and receive HCBS or ABD Medicaid benefits.

 

Home Equity Limits

There are cases when the primary residence will be counted as an asset even if the Medicaid Long Term Care applicant/beneficiary plans to return home or is living in the home, and this is based on the home’s equity interest, which is the fair market value minus what is owed on the home’s mortgage. For 2022, most states have set their home equity interest limit at either $636,000 or $955,000. California is an exception and does not have a home equity interest limit.

– For a single Nursing Home Medicaid Long Term Care applicant, the primary residence must be at or below their state’s home equity limit for it to be considered exempt when the applicant files an intent to return home document.
– For married couples with both spouses applying for Nursing Home Medicaid LTC, the home equity interest of the primary residence must be at or below their state’s home equity interest limit and one of the spouses must file an intent to return home for the home to exempt from the asset limit.
– For a married couple with one spouse applying for Nursing Home Medicaid LTC, however, the primary residence is exempt regardless of its equity value or the state’s home equity value limits as long as the non-applicant spouse lives in the residence.

The same basic principles apply to the Home and Community Based Services (HCBS) Medicaid program.
– For single HCBS applicants, the primary residence will be non-countable as long as they are living in it and its home equity interest is below the limit for the state in which they reside.
– For married couples with both spouses applying for HCBS Medicaid, their primary residence will be non-countable as long as one of them is living in it and its home equity interest is below the limit for the state in which they reside.
– For a married couple with one spouse applying for HCBS Medicaid, the primary residence is exempt regardless of its equity value or the state’s home equity value limits as long as the non-applicant spouse lives in the residence.

For Aged Blind & Disabled (ABD) Medicaid applicants, the primary residence is exempt from the asset limit regardless of home equity interest as long as the applicant (or one of the applicants in a married couple) is living in the residence or has filed an intent to return home document.

 

The Best Time to File Intent to Return Home

Medicaid Long Term Care applicants who do not have any qualifying family members living at home will need to file an intent to return home document with their application in order to make the home a non-countable asset. But even if a nursing home Medicaid Long Term Care beneficiary has a qualifying family member living in their primary residence that makes that home an exempt asset, the beneficiary should still file an intent to return home as soon as possible after they enter the nursing home. This way, if the qualifying family member leaves the home for any reason in the future, the home will remain an exempt asset without any possible penalty or gap in coverage.

If the Medicaid applicant/beneficiary is not able to express their intent to return home, federal law allows their spouse or another family member to express it for them. However, it’s still advisable for the applicant/beneficiary to document their intent to return home as soon as they enter the nursing home in the event their spouse or family is not available to create the intent to return home document in the future.

 

Intent to Return Home Limitations

 

Medicaid Estate Recovery Program

While intent to return home can keep one’s primary residence from being a countable asset when it comes to qualifying for Medicaid Long Term Care, intent to return home does not protect the home from estate recovery.

Every state has a Medicaid Estate Recovery Program. The law requires that after a Medicaid Long Term Care beneficiary dies, these estate recovery programs attempt to collect reimbursement for the cost of care the beneficiary received from the state’s Medicaid program. The reimbursement comes from the beneficiary’s estate, and the most prominent asset in these estates is often the home.

Because they plan to attempt to collect reimbursement and know it will often be through the home, states will put liens on Medicaid recipient’s homes. A lien prevents the recipient from selling or transferring the home before their death in an attempt to stop Medicaid from trying to collect after their death. Medicaid cannot put a lien on a recipient’s home if their spouse, sibling with partial ownership, adult child caregiver or minor, blind or disabled child lives there.

There are ways to protect the home from estate recovery, like asset protection trusts and Ladybird Deeds. There are also times when the state will not attempt to collect reimbursement, like when the deceased recipient’s spouse is still alive, or if the deceased has a minor, blind or disabled child, or the Sibling or Child Caregiver Exemption has been invoked. Many states also have a one-year statute of limitations on estate recovery.

 

Time and Health limits

Some states set a limit on the amount of time that a Medicaid Long Term Care recipient’s intent to return home is valid. Virginia, for example, allows the intent return exemption to last a maximum of six months. This means that after six months in a nursing home a Virginia resident is considered to be permanently living in the nursing home, so their intent to return home exemption will end at that time and the Medicaid recipient’s home will be considered an asset. Hawaii also assumes that after six months in a nursing home there is no intent to return home, unless a discharge plan is in place.

Some states, like South Dakota, also allow doctors and nursing home staff to overrule an intent to return home document. If the medical professional believes there is no possibility the Medicaid Long Term Care recipient will be able to leave the nursing home, the intent to return home will be ruled invalid and the home will be counted as an asset.

When a home goes from exempt to countable and puts the Medicaid recipient over the asset limit, they can still receive Medicaid benefits by selling the home and “spending down” the proceeds on Medicaid-approved items and services, such as nursing home care.

 

Intent to Return Variances by State

While many states do share rules governing intent to return home policies, there are some differences when it comes to the asset limits and home equity interest limits that impact intent to return home, as discussed above, as well as the actual intent to return home document.

Another important difference between states is if they use a 3rd party to verify if the individual’s intent to return is reasonable. Thirty-nine states and Washington, D.C., use subjective criteria, meaning the Medicaid recipient simply needs to state their intention to return home and that intention will be honored, regardless of how long they have already been institutionalized or what their actual prospects are of returning home.

The other 11 states, which are known as 209(b) states, use objective criteria to determine the validity of the intent to return home and the exempt or countable status of the primary residence. These states will use an assessment by a physician or other medical professional to determine the likelihood of the Medicaid recipient actually returning home. These states may also assume a permanent change of residence after an extended stay in an institution. The 209(b) states are Connecticut, Hawaii, Illinois, Indiana, Minnesota, Missouri, New Hampshire, North Dakota, Ohio, Oklahoma and Virginia.