Medicaid Case Study: Can You Identify an Uncompensated Transfer?

home replacement and compensated transfers

EO, a widow at 92, is in a long-term care facility. She owned a home jointly with her family. She received a notice from the Texas Department of Transportation that the State had to acquire her property for road expansion and would purchase her property.

The policy found in MEPD Handbook F-3121 states that if you sell your homestead, you have 90-days to reinvest the proceeds into a new replacement home, which she did. HHSC delayed her case because she:

  1. Never resided in her new home-- which is not required with a replacement home, and

  2. Wanted to consider the purchase of the new residence as a transfer because her daughter previously owned the property. It was a fully compensated exchange and not a gift-- thus not a transfer of assets

The Michels Law Firm argued the regulations found in the Medicaid Handbook, “If a home was excluded for intent to return and the individual purchases a replacement home, the replacement home retains that exclusion even if the individual has not physically occupied the new home.” HHSC requested a policy clearance with the legal department. Once HHSC Legal determined that The Michels Firm interpretation of the policy was correct, the HHSC caseworker was able to certify the long-long term care benefits. Without a proper challenge, the denial would have been sustained.