Negotiating with Medicaid?

13 Replies

I'm looking for some advice from those who have purchased a home that involves Medicaid's approval.

Backstory: there is a property for sale that I really like but the price is a little too high right now. It is priced at the value of the county's tax assessment. The listing agent tells me that the price is non-negotiable due to it having been set by Medicaid (the owner is in an assisted living facility). 

My experience with Medicaid and real estate is limited to when my grandmother had to pay the equivalent of her apartment's rent payment to Medicaid after she moved into assisted living.

The agent also shared that once the asking price is offered there will not be any drawn out period of having to get approval by Medicaid. In essence, the sale will move forward like a traditional sale.


1) Does anyone have experience in negotiating the price? The value is in the land.... as the house is going to be taken down to the joists and studs. Nothing else is salvageable. That is why the price is higher than I would offer in a traditional (or even foreclosure) type of sale.

2) I have a feeling that the house is owned free and clear so I do not think that the Medicaid lien would be more than then assessed value. Is there something else specific to Medicaid I should be looking for or considering that I am not? 

Thanks in advance. 

I do not understand this.  I believe Medicaid could have a lien on the property but I don't believe they have anything to do with the value of the property.  They don't have anything to do with the market value of the property.

You could call the local Medicaid office and ask to speak to the Medicaid supervisor and ask this question and if you are lucky enough to reach the right person you should get more informtion

My understanding is that Medicaid has Nothing to do with the selling price.   They just have a lien on any profit that would go to the owner who is now in the Nursing facility.  Medicaid is not in the appraisal bussiness and has no idea what a property is worth.  Medicaid is now paying the owner of the propertie's medical bills and if the owner gets additional money from the sale of the house Medicaid can recoup some of their expenses. 

I don't think the listing agent knows what they are talking about.

Medicaid likely has a lien (some states are mortgage theory some states are lien theory) on the house, so you can really think about this purchase as a short sale. 

The owner likely owes Medicaid a huge sum of money for nursing home or other services, and Medicaid thinks they can get asking price. In other words, they'd rather foreclose and sell it themselves unless they can get asking.

They must also be in a jurisdiction where a lady-bird deed wouldn't take care of the Medicaid issues.

Medicaid does not sell houses

Originally posted by @Barbara G. :

Medicaid does not sell houses

They aren't selling the house. A Realtor is. However Medicaid can consider, in some instances, a house as an asset when the owner moves into assisted living and draws from medicaid for their living (and other?) expenses.

From the HHS website:

An exempt “home” generally becomes a countable asset -- that is, its equity value is counted against Medicaid eligibility limits -- if the owner has no living spouse or dependents and

  • Moves into a nursing home or other medical institution on a permanent basis without the intent to return,
  • Transfers the home for less than fair market value, or
  • Dies.

Using home equity: When the house is no longer a "home" and becomes a countable asset, Medicaid may require its equity to be spent on the homeowner's healthcare costs. A lien may be imposed on the home to ensure this outcome. The homeowner may also lose his or her Medicaid eligibility, at least temporarily.

Hi @James Miller

Thanks for your input. I was wondering myself this morning, before I posted my question, if this is like a short sale in that the owner owes Medicaid and they (Medicaid) won't take below a certain price for the asset being sold. 

Any idea on how I can check for a lien of this nature? 

Originally posted by @Barbara G. :

I don't think the listing agent knows what they are talking about.

Hi again - I was reading the replies from the bottom up and now realize that my last post probably was telling you exactly what you had already told me. Sorry for repeating more or less what you had already said.

I agree in that I'm not sure that the listing agent fully understands. I'd like to offer a price for the property based on what I would offer if this was a traditional or estate sale but I don't want to waste anyone's time -- including my own -- if an offer below asking price is never going to even be considered. 

You know, a house is a coutable asset, and Medicaid would require that it be used when a spouse or an adult child is no longer living there.  In this situation it appears that is not the case and if the house sells medicaid will be one of the debtors to be paid.  Although it is a federal program I believe it is a partnership with the state and Va's medicaid might be different then another's state in the way they handle this. However I can not see Medicaid setting a price although they might want to know what similar houses in that poor condiiton are selling for.  Everything must be negotiable, and you certainly are entiiteled to point out that yur bi is a reasonable one.  Are tny other eople interested in bidding on this house? I would put your bid in for the price you usually would bid, even if it is below what the agent has told you and see how they handle it.

The other question is who is selling the House?  Is the owner selling the house or is a relative selling the house? Who has given the house and signed the papers to have the house sold?  Certainly you can have  another discussion with the agent.

@Barbara G. - all great points. I haven't submitted anything yet but have been leaning towards offering what I would if this was a "normal" sale. At the worst they can scoff at my offer and the world will continue to turn.

My understanding is that the owner is himself selling the house. The house is vacant and appears that it has been so for some time now. 

i have a similar situation. mixed with a reverse mortgage going through probate. which exceeds what i can even offer on. i just wanted to see if i am able to make my offer and owner can sell property and take care of medicaid separate, such as payments and such.. please let me know how this went

Hi @Raden Mantuano . Unfortunately I don't have any follow up information to share. The listing agent was flakey and all of the conversations I had with him were very disjointed. When I would talk to him on the phone I always got the impression that he was in the middle of something else and that other task required 90% of his attention and brain -- even when he was the one calling me! 

I generally follow up on properties that I had a sincere interest in to see if I can learn anything from the publicly listed sales information. I assume it eventually sold but this one I have pretty much trashed from my notes seeing as how it ended up being a huge waste of my time. 

Best of luck with your pursuit. 

@Raden Mantuano It isn't Medicaid that you're dealing with in CA. It's Medi-Cal. Entirely different.

I posted for you, however you either did not read it or just did not follow.

You'd do well by focusing on lead generation rather than trying to squeeze juice from a dry lemon. 

Either way, it's a numbers game.

Originally posted by @Rick H. :

@Raden Mantuano It isn't Medicaid that you're dealing with in CA. It's Medi-Cal. Entirely different.

I posted for you, however you either did not read it or just did not follow.

You'd do well by focusing on lead generation rather than trying to squeeze juice from a dry lemon. 

Either way, it's a numbers game.

 Yes you are right. I let it go and will follow up. 

I guess I'm getting Medicaid and medical mixed. Basically I'm dealing with estate recovery. Till then move on, hope she can waive the claim and come back later. 

Join the Largest Real Estate Investing Community

Basic membership is free, forever.

By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.