Serving clients in Houston TX and surrounding areas with Medicaid Planning Services.
The high cost of long-term care has made planning a critically important issue for seniors and their families. In fact, most older individuals will require some form of long-term care. Sadly, many are unprepared for the significant financial burdens that long-term care places on a family’s hard earned savings. Financial devastation looms large for a family facing ongoing care at a rate of $3,000 to $5,000 or more per month.
Medicaid Long-Term Care Overview
Medicaid is a joint federal-state program that provides medical assistance to low-income individuals, including those who are 65 or older, disabled or blind. Medicaid is the single largest payer of nursing home bills in America and serves as the option of last resort for people who have no other way to finance their long-term care. Although Medicaid eligibility rules vary from state to state, federal minimum standards and guidelines must be observed.
In Texas, Medicaid provides access to home care as well as nursing home care. While Medicaid eligibility with respect to long-term care was not difficult in the past, there has been a steady trend towards more complex and restrictive rules, the latest being the Deficit Reduction Act of 2005 which went into effect in 2006. These changes have resulted in complex eligibility requirements for those in need of Medicaid benefits. It’s no longer as easy as reviewing one’s bank statements. There are a myriad of regulations involving look-back periods, income caps, transfer penalties and waiting periods to plan around.
Texas Medicaid includes a home care program, known as Community Attendant Services (CAS) or Primary Home Care, which helps elderly and disabled Texans remain at home in the community and avoid institutionalization in a nursing home. CAS provides up to about 20-25 hours per week of in-home assistance with activities of daily living, but no other Medicaid benefits. The income and resource limits for CAS eligibility are about the same as for the nursing home program, however there is no look-back period and the program does not allow the use of a Miller Trust or the spousal impoverishment rules, which are discussed below.
Community Based Alternatives (CBA), now called the Home and Community-Based Star Plus Waiver (HCBS-SPW), provides a higher level of in-home and community-based care in a few assisted living facilities. SPW eligibility rules are very similar to the eligibility rules for nursing home care, but with important differences. In addition, there is a waiting list for applying, no retroactive coverage is available, and application procedures are more complex, involving multiple governmental departments and a managed care organization. Immediate transfer to SPW is available to recipients of nursing home benefits in the Money Follows the Person program.
Medicaid Nursing Home Eligibility in Texas
Medicaid Single Income Limit: $2,382
Medicaid Couple Income Limit: $4,764
Medicaid Single Resource Limit: $2,000
Medicaid Couple Resource Limit: $3,000
Community Spouse Resource Minimum: $26,076
Community Spouse Resource Maximum: $130,380
Spousal Monthly Allowance: $3,259.50
Personal Needs Allowance: $60
Income Limit and Miller Trusts in Medicaid Nursing Home Program
To qualify for Medicaid nursing home care in Houston, an individual can receive no more than $2,382 in 2021 in Social Security, pension, and other countable gross monthly income. However, if your monthly income exceeds the limit, it is still possible to qualify for Medicaid by creating a Miller Trust, or Qualified Income Trust (QIT).
The Stone Law Firm can assist you with creating a Miller Trust. We draft a trust agreement to create the trust and guide you through the steps for creating and administering the trust. Nancy Stone, Attorney at Law, has the experience and expertise to assist you with creating a Miller Trust or QIT to obtain Medicaid nursing home benefits.
The Miller Trust agreement must be signed by the Medicaid applicant and the trustee, who is usually a spouse, adult child, or other caregiver. Next the trustee opens a trust bank account and deposits the applicant’s income into the account each month. The trustee must write certain checks each month, in accordance with Medicaid rules. If any extra funds accumulate in the trust, they are paid to Medicaid when the beneficiary dies, to repay the program for services provided to the beneficiary. Although some income is lost, the beneficiary receives more in benefits than the beneficiary’s income could otherwise purchase. The use of a QIT or Miller Trust is completely legal and has been approved by the U.S. Congress.
Only an individual’s income can be transferred to a Miller Trust. The amount of resources or property that an individual or couple can have is also limited by Medicaid. A Miller Trust cannot be used to spend down resources, property, or assets, in order to qualify for Medicaid. Yet there are legal options that allow individuals and married couples to preserve hard-earned savings and other assets, and still qualify for Medicaid. The Stone Law Firm can assist you with asset preservation and Medicaid eligibility. Please call 713.434.6310 today for a free telephone consultation on how to qualify for Medicaid long-term care.
Countable and Excluded Resources in the Medicaid Nursing Home Program
Countable resources include cash, checking and savings accounts, CDs, stocks, and any other liquid assets or real property that an individual owns and could convert to cash. The Medicaid resource limits in 2021 are $2,000 for an individual and $3,000 for a married couple when both apply for benefits. Countable resources may be converted to excluded resources.
Excluded resources are not considered in determining Medicaid eligibility. Excluded resources include:
- One automobile of any value
- A home, if the applicant intends to return home and home does not exceed maximum equity value
- Whole life insurance with a total face value (death benefit) of $1,500 or less
- Term life insurance regardless of the face value
- Certain trusts
- Certain annuities
- Personal property
Protection from Spousal Impoverishment in the Medicaid Nursing Home Program
In 1988, Congress passed the Medicare Catastrophic Coverage Act (MCCA), which includes provisions, known as spousal impoverishment protections, which were designed to avoid impoverishing the community spouse when one spouse is institutionalized. Under the MCCA, the income of the community spouse is not available to the institutionalized spouse at any time for the cost of care. In addition, the community spouse is entitled to a monthly spousal allowance (Minimum Monthly Maintenance Needs Allowance), which is $3,259.50 per month in 2021. If the community spouse’s income is less than the spousal allowance, the community spouse can receive additional income from the institutionalized spouse to bring the community spouse up to the spousal allowance.
Under the spousal impoverishment protections, the community spouse may keep one-half of the couple’s countable resources, up to a maximum of $130,380. This is known as the community spouse Resource Allowance (CSRA), which in 2021 is a minimum of $26,076 and a maximum of $130,380. This is in addition to the $2,000 of assets that the institutionalized spouse may retain.
This is a general rule, however, and the couple should consider additional strategies to protect the community spouse from impoverishment, such as expansion of the CSRA and converting resources to income for the community spouse. Generally, the CSRA may be expanded if the community spouse’s total income is lower than the spousal allowance, even after adding income from the institutionalized spouse. The expanded CSRA gives the community spouse additional assets to invest to make up the deficiency in income.
Medicaid Attorney Nancy Stone has the expertise to guide you in obtaining Medicaid nursing home eligibility, while legally protecting a maximum amount of your family’s assets. Please call 713.434.6310 for a free telephone consultation on how The Stone Law Firm can assist you with Medicaid eligibility and applications.
Transfers of Assets Policy in the Medicaid Nursing Home Program
The look-back period for transfers of assets is five years or 60 months. A gift, or transfer of assets for less than fair market value, that occurred during the look-back period is penalized. The penalty is a period of ineligibility for Medicaid nursing home benefits which is not imposed until the client is admitted to the nursing home and otherwise eligible for benefits.
There are important exceptions to the transfer penalty. For example, transfers of assets between spouses are not penalized. Furthermore, a gift or transfer of assets for a purpose other than qualifying for Medicaid is not penalized, however Medicaid presumes that a transfer was for the purpose of qualifying for benefits.
Medicaid Attorney Nancy Stone, serving Houston, TX, can help you navigate the complex Medicaid rules for financial eligibility and legally protect your hard-earned savings and assets. Call The Stone Law Firm at 713.434.6310 for a free telephone consultation with an experienced Houston Medicaid attorney.