The Medicaid Rule That Can Put Your Family Home at Risk

When Philomene Benoit died in 2012, the New Jersey home she and her husband had owned for more than 25 years remained with her surviving spouse, Clerveaux.That might have seemed to settle the question of what would happen to their family home. But Philomene had received Medicaid-funded care for nearly nine years, leaving behind $415,501.30 in benefits the state would eventually seek to recover. The state deferred collection until Clerveaux's death in 2019, after which New Jersey filed a lien against the property. When the home was sold two years later for about $302,000, the Medicaid claim was more than $113,000 greater than the entire sale price.The net proceeds were placed in escrow while Clerveaux’s beneficiaries challenged the state’s right to recover from them. But in March of this year, a New Jersey appeals court upheld the state’s claim.The case turns on a contradiction buried in the rules governing Medicaid and the family home: A house can be protected enough for someone to keep it while receiving benefits, but not necessarily protected enough to pass to their heirs afterward.“The biggest misconception is that people think that the house is safe just because Medicaid doesn’...