Okay thanks. Now that you have given me your parents' income I can tell that you are likely correct that they are receiving MediCAID. Medicaid is a low income/low asset program that covers healthcare costs. Medicare is a health insurance
program for all seniors. Most have to pay $100 per month for premiums
and another $200 per month for supplemental policies.
For retirees that are on social security and qualified for Medicare, Medicaid can cover the costs of a Medicare supplement
and the premiums for Medicare. The income standard to qualify for this type of Medicaid is pretty low (less than $1,000 per couple). However, given that your parents income is less than $1,000 per month, then it is likely that they are receiving Medicaid as well as Medicare. To be qualified for Medicaid their assets would have to be below $6,000 in countable assets, not including a home and automobile. If they have less than the $6,000 in countable assets they are nearly certainly receiving Medicaid benefits.
If they are receiving Medicaid benefits then the sale of their home to the state will result in them loosing their Medicaid benefits. Their home is currently a noncountable asset, once it is sold then they will have $82,000 in countable cash. Until the countable cash is reduced to below $6,000 they will be ineligible for Medicaid. They are under a continuing obligation to report the sale to the Medicaid case worker.
One way to quickly reduce the cash is to reinvest the cash back into a home. There are other exempt assets that can be purchased including prepaid funeral contracts
and personal property. This process of reducing assets quickly is called "spend down." To prepare for a quick protection of assets they should seek the counsel of an experienced elder law attorney in their area. They can find one at www.naela.org
I cannot provide you with legal advise. I have provided you with information about the law related to your question. My answer, and any information that you find online, should not take the place of having a consultation with a lawyer in your area to advise you regarding your specific issues.
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