Elder Law Attorneys in Greenville
Serving Clients across Hunt County & the Surrounding Areas
Medicaid is the largest payer of long-term care services in Texas. However, in order to obtain benefits, the applicant must meet several stringent eligibility requirements. As of 2012, in order to be eligible for Medicaid long-term care benefits, the applicant must have no more than $2,094 per month in income if single, $4,188 if married, and no more than $2,000 in countable resources. Therefore, an individual with $50,000 in liquid assets would be forced to "spend-down" $48,000 before he or she would qualify for benefits.
With proper planning, however, we may be able to convert those countable resources into excluded assets and preserve them for future generations while still being able to qualify for benefits sooner. This may require the use of trusts, gifting, and other advanced estate planning strategies in order to save as much of your hard-earned assets as possible.
Willeford, Duff & Council is devoted to addressing elder law issues for seniors and their children. Mr. Council is an elder law attorney in Greenville dedicated to providing seniors with the knowledge and tools necessary to ensure they receive the care they need. If you have concerns over how your loved one will pay for their long-term care, call our office to see how we can help.
Why Use Medicaid?
For many elders living in nursing facilities, Medicaid is the only way they can pay for the care they need. Others who attempt to self-pay later find they have exhausted their resources and eventually end up needing to utilize Medicaid benefits. According to the AARP, 90 percent of nursing home residents exhaust their resources and reach the poverty level after only 26 weeks of care. Therefore, for many, the cost of waiting to apply for benefits is their entire life savings. This can be detrimental, especially when there is a spouse living at home. Where there is a spouse at home, Medicaid will allow him or her to keep a large portion, if not all, of their combined countable resources. Therefore, it may be more beneficial for the couple to go ahead and utilize state benefits, rather than private pay as long as possible, in order to preserve more funds for the spouse living at home. Mr. Council is an elder law attorney who can analyze your resources and help you decide whether Medicaid is going to be the best option for funding necessary long-term care.
Who Qualifies for Medicaid in Texas?
Medicaid is a government program that provides health services/insurance for low income or disabled individuals who qualify by meeting the following criteria. Medicaid in Texas only covers a select few adults including:
Women who are currently expecting a child and have a low income (only covered until 2 months after delivery).
Women with Breast or Cervical Cancer who are low-income (only covered during treatment).
Extremely low-income parents that are the guardians of two or more children. Parents of 2 children must earn less than $386 per month to get Medicaid coverage.
Former Foster Care Children are covered between the ages of 19-26.
Elderly Individuals(65+) who have a low income or are below the poverty level.
People with disabilities, who are living in poverty.
The majority of individuals who are able to work and keep a job are not eligible for Medicaid in Texas. We understand the hardships of figuring out your health insurance. We are here to make sure you know your options and if you are eligible for Medicaid. Give Willeford, Duff & Council, PLLC a call today to discuss your case and schedule a consultation.
- Related Reading: MEDICAID – Not Just for the “Working-Man”
Medicare Is Not Enough
Medicare alone will not provide for the care you or a loved one may need for nursing home care. The Medicare program will compensate for a total of 100 days of skilled nursing services. This includes the period of stay in a hospital. Once the 100-day time period has expired, the individual is left to provide for his or her care out of pocket. Since the average stay in a nursing home, according to the National Nursing Home Survey, is 892 days or 2.44 years, there is a good chance you or a loved one will need nursing home services for a longer period than your Medicare coverage will pay. Proper planning for Medicaid is vital to ensure care will be received when and if the time comes. Willeford, Duff & Council has the ability to help you qualify and guide you through the application process to ensure there will be no loss of care.
Some General Principles to Keep in Mind
It is important to remember that Medicaid can only look at transfers occurring within the previous five years before an application for benefits is filed. However, trusts present some special rules that can enable Medicaid to count trust property against an applicant for eligibility purposes, even if the transfer was made more than five years prior to the application date. Now, with the passage of OBRA 93, if a trust was established or contributed to by the applicant and the trustee has the discretion to distribute trust property to the Medicaid applicant, the entire trust corpus will be counted against the applicant for eligibility purposes. Therefore, there are now only a select few "trusts" which will still allow for eligibility.
Qualified Income Trust Texas
If your income is too high to be eligible for Medicaid you can assign your money to a qualified income trust or more commonly, a Miller Trust. A qualified income trust allows an applicant making more than the allowed Medicaid cap, currently $2,049 per month, to assign their monthly income to the trust.
The applicant would then be allowed to retain their monthly needs allowance, pay unreimbursed medical expenses, insurance premiums, etc. The remaining funds in the trust would then go to the nursing facility as a Medicaid co-payment. If done correctly, there should be no money remaining in the trust at the end of each monthly income cycle. This method allows an applicant with an income, for example, of $3,500 per month, to qualify for benefits.
Can I Transfer My Property to a Trust in Order to Qualify for Medicaid?
Generally, no; but the full answer is it depends. If the trust you are considering transferring property to is irrevocable and does not allow for an income interest to the settlor (you), then you could try to transfer funds to the irrevocable trust and wait out the five-year look-back period. If, however, you needed to file an application for benefits within the five years after making the transfer to the trust, you would be assessed a penalty for the amount of the transfer. What's worse, since the trust is irrevocable, you would not be able to transfer the trust funds back to yourself in order to do further planning. For this and other reasons, this is generally not an advisable solution to Medicaid eligibility. For instance, most are not comfortable transferring their money to a trust without having an income or beneficiary interest.
There are certain types of trusts that are excluded for Medicaid purposes under certain specific circumstances. Those include: Under 65 Supplemental Needs Trusts, Miller Trusts, Pooled Special Needs Trusts, and trusts for the "sole benefit" of a person with a disability.
Can I Leave Money to My Children in Trust without Preventing Their Future Medicaid Eligibility?
Yes! Trusts that were not established by the applicant, but rather by some
third party, including parents or other relatives, by will of the community
spouse, or by will(s) of the recipients of gifts during the planning process
are excluded as resources for Medicaid eligibility purposes. In order
to be excluded, the trust must have been funded by someone other than
the applicant. Even more beneficial is that the Texas Long-Term Care Medicaid
program will not count the assets of a third-party-settled trust as a
resource against the applicant even if given broad discretion to distribute
funds for the applicant’s health and maintenance. What is important
is that the trustee's discretion be either absolute or limited to distributions
that supplement, but do not supplant or replace state benefits. Most,
if not all, forms for "supplemental needs trusts" include this
language. Still, you should consult an elder law attorney before creating
such a trust.
Willeford, Duff & Council is ready to assist you with your long-term care funding issues. Whether your family is in a Medicaid Crisis situation or you are in need of some advanced planning for future care, we have the ability to guide you through this process and develop the most efficient method of obtaining long-term care.
Call our elder law attorneys in Greenville today at (903) 407-4072 to schedule your consultation.