Couples are living longer, and that is both a good thing and a bad thing.
Good because who doesn’t want another day together basking in sunshine and eating ice cream?
Bad because it increases the chances that your spouse will need a nursing home that you can’t pay for.
Enter Medicaid.
Understanding Texas Medicaid Programs
Texas has 42 individual Medicaid programs, but we will focus on only one: Nursing Home Medicaid. It covers most medical and support needs for a person who needs nursing facility care.
Let’s assume you are married to Bob, and he needs nursing home care. You know that 90% of nursing home residents exhaust their personal financial resources in 36 weeks or less, so you want to qualify Bob for Medicaid to avoid impoverishment.
Nursing Home Medicaid Requirements
Is Bob eligible for Nursing Home Medicaid? Let’s see.
1. Age and Residency
He must be a US citizen or a qualified alien. He must be a resident of Texas. He must be either 65 or over, blind, or disabled.
2. Medical Necessity
Bob must meet a medical necessity requirement for a nursing home case. Generally, that means he has a medical disorder or disease requiring attention by registered or licensed vocational nurses on a regular basis.
3. Income and Resource Limit
He must fall within an income and resource limit. [Warning: numbers ahead]
Bob’s income must be limited to $2,901 per month. If he makes more than that, then he can set up a Qualified Income Trust, known as a “Miller Trust,” to receive his income. Where does that leave you? If your monthly income is below $3,948, then you may be able to keep a portion of Bob’s income to meet your living expenses.
Bob also has a resource limit for his countable assets. Because you are married, Bob’s resource limit is half of your combined resources, but as a spouse, you can set aside a maximum amount of $157,920 as protected.
However, you need to focus on the phrase “countable assets.” These exclude assets that Texas has deemed will not be counted against the limit. Happily, it is a long list that includes a home, a car, business property, some livestock, most household items, burial plots, and pre-paid funeral arrangements.
4. Occupying a “Medicaid Bed”
Finally, to be Medicaid-eligible, Bob needs to be occupying a “Medicaid bed” in an eligible facility.
The foregoing recitation is just a broad overview. There are multiple rules with additional exceptions, requirements, and generally confusing language.
Medicaid Requirements to Remember
As you begin your research, here are a few things to keep in mind.
- Medicaid planning is legal and ethical.
- Some planning ideas may be counterintuitive. For example, Bob’s Medicaid planning may involve transferring title to all countable property to you.
- It is usually not a good idea to sell or get a reverse mortgage on your home, because you will have taken a non-countable asset (your home) and turned it into a countable asset (cash).
- You may be tempted to gift assets so they will not be counted against you. Don’t do that unless you understand the ramifications. Your friendly government has figured out this tactic and put in place a five-year “look-back” penalty for gifts that may disqualify Bob from Medicaid eligibility for months or years.
- There are a lot of people out there who will offer to help you with Medicaid planning, but….Medicaid planning by a non-attorney is illegal and a Class A misdemeanor. A lot of those offers come from people who want to sell investment products or illegally charge you fees.
- The dollar amounts cited are for 2025. Medicaid law can change at any time, so do your planning with a reputable attorney.
Medicaid Planning is Important and Hammerle Finley is Here to Help
If you or a loved one have questions about Medicaid planning or would simply like to get started, schedule a consultation with our team of expert attorneys.
Virginia Hammerle is an accredited estate planner and represents clients in estate planning, probate, guardianship, and contested litigation. She may be reached at legaltalktexas@hammerle.com. This blog contains general information only and does not constitute legal advice.
