How an “Intent to Return Home” Works: Qualifying for Medicaid and Protecting the Home

Last updated: November 12, 2021

 

Introduction

For Medicaid eligibility purposes, one’s primary home, also called a principal residence, is generally a protected asset. This means it does not count towards Medicaid’s asset limit. However, for the home to be exempt, the Medicaid applicant / beneficiary must live in the home or have a spouse, minor child, or child of any age who is blind or disabled who lives in it. In the case of nursing home care, an individual does not live in their home. What happens if one of the abovementioned relatives do not live in the home? Is there a way for the home to maintain its exempt status? Does the home lose its exempt status and result in Medicaid ineligibility? Does the home have to be sold and the proceeds used to pay for one’s long-term care?

 

What is “Intent to Return Home” & Its Relevance to Medicaid Long Term Care?

“Intent to return” protects a nursing home Medicaid beneficiary’s primary home as an exempt (non-countable) asset. The intent to return means that if a senior’s condition improves and nursing home care is no longer required, the individual intends to return home. This means their stay in the nursing home is considered temporary and their home maintains its exempt status as the individual’s principal residence. Even if it is unlikely the individual will be able to return home, intent to return is generally still valid and preserves the exempt status of one’s home.

One’s primary home is the home in which the Medicaid beneficiary lived full time prior to nursing home admission. In addition to houses and condominiums, mobile homes and houseboats can also qualify as one’s primary home. The individual does not have to own the property on which a mobile home sets.

While “intent to return” is most commonly associated with institutionalization (nursing home Medicaid), it is also relevant, although with much less frequency, for other types of Medicaid. For instance, a senior applying for regular state Medicaid, often called Aged, Blind and Disabled (ABD) Medicaid, or home and community based services (HCBS) via a Medicaid waiver might live outside of their home (i.e., with an adult child or close friend). Their home can also be protected as an exempt status through “intent to return”. An exception may exist for elderly individuals residing in an assisted living residence. Living in this type of setting may be seen as a permanent move, which means one’s primary home cannot be protected as an exempt asset. Some states, however, allow one’s home to be exempt for as long as 12-months as long as there is an intent to return.

 

How Does an Intent to Return Home Work When Applying or Receiving Medicaid?

While intent to return is sometimes implied (unspoken), it is best to establish this intent in writing. This can be done by via a letter signed by the individual or an affidavit, a written statement under oath. Medicaid beneficiaries can express this intent themselves, or if they are unable to do so, a spouse or another relative may do it for them.

Some states, such as South Carolina and Texas, utilize a formal Statement of Intent to Return Home form that must be provided as evidence of one’s intent to return. To be clear, there is no official uniform intent to return form that is utilized across all 50 states. Regardless of the exact form, it is a signed statement indicating that although one does not currently live in their home, their absence is only temporary, and they consider it their principle place of residence. Given their condition improves, they will return to live in their home.

Relevant to intent to return is one’s home equity interest. This is because for nursing home Medicaid, there is a home equity interest limit if an applicant does not have a spouse or minor, blind, or disabled child living in the home. Home equity is the value of the individual’s home minus any debt against the home, such as a mortgage. One’s equity interest is the value of the equity owned by the applicant. In 2021, the majority of states set the limit at $603,000 or $906,000. California is an exception and is the only state that does not set a limit. This means if none of the abovementioned relatives live in the home and the senior’s home equity interest is greater than the allowable amount, intent to return is likely not a viable option. This is because the home loses its exempt status, which more likely than not, will result in Medicaid ineligibility, as the asset limit in most states is just $2,000.

 Without an intent to return home, one’s home becomes a countable asset because it is no longer considered the senior’s primary residence. This means one will likely not be eligible for nursing home Medicaid.

 

Are there Monetary or Time Limitations with an Intent to Return Home?

An intent to return is not a foolproof method of protecting one’s home as an exempt asset. Some states limit the amount of time a nursing home resident can maintain an intent to return. Virginia, is one such state, and only allows an intent to return exemption for 6 months. This means that after 6 months, one’s stay in the nursing home is considered permanent, their home is no longer considered their primary residence, and it becomes a countable asset. Hawaii also presumes that after 6 months of nursing home care, there is no intent to return home if there is no discharge plan.

It is also possible for doctors and nursing home staff to overrule an expressed intent to return if it is determined the nursing home resident’s health will not allow a future return home. In this case, the intent to return is rescinded and the home becomes a countable asset. South Dakota is one state in which this has happened.

As most states have a $2,000 asset limit, the overturning of an intent to return will likely result in Medicaid disqualification. The home will have to be sold and the proceeds “spent down”, often on nursing home care, until Medicaid’s asset limit has been met again. To see state-specific asset limits, click here.

 While intent to return protects one’s primary home from Medicaid’s asset limit, it does not protect the home from Medicaid’s estate recovery program.

 

Can a Lien be Filed Against the Home with an Intent to Return?

Yes, it is possible for the state Medicaid agency to file a TEFRA lien against one’s home if it is determined one’s return home is unlikely. A lien is a legal claim against the home that is used to collect debt. Medicaid has a mandatory estate recovery program through which a state’s Medicaid agency attempts reimbursement of Medicaid-funded long-term care costs following the death of a Medicaid recipient. The home is often the last remaining asset of any value and through a lien, the state is protecting a claim against the home for reimbursement. An intent to return protects one’s home from Medicaid’s asset limit; it does not protect the home from estate recovery.

A lien cannot be placed on the home if the Medicaid beneficiary has one of the following family members living in the home:
– Spouse
– Minor Child (under 21 years old)
– Blind Child
– Disabled Child
– Sibling who has equity interest in the home and lived there at least 1 year immediately prior to the Medicaid beneficiary’s nursing home admission

To be clear, a lien does not force a living Medicaid beneficiary to sell their home. Furthermore, if a nursing home resident returns home, the lien is removed.

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