Many Americans rely on Medicaid to provide necessary healthcare coverage when they do not have employer-sponsored or private health insurance. However, few understand the purpose of the program, its intricacies, or how planning for Medicaid can drastically reduce an individual’s financial concerns. Medicaid is a federal healthcare program operated jointly by the federal government and state governments. Like Medicare, the purpose of Medicaid is to provide healthcare coverage for those in need. While both programs ease the financial burden of healthcare coverage, Medicaid differs from Medicare in that Medicaid is means tested and offers coverage for nursing home care and personal care services which are not covered by Medicare. Because Medicaid has stringent eligibility requirements, consulting with an experienced Medicaid planning attorney is essential to ensure that you qualify for Medicaid when you need it.

Located in Fort Worth, Texas, the Law Office of Carey Thompson, PC has helped clients of all ages plan for the future. The attorneys at the Law Office of Carey Thompson, PC, specialize in estate and long-term care planning, of which Medicaid planning is an integral part. As a result, the Law Office of Carey Thompson, PC is uniquely situated to help you plan for Medicaid eligibility while still living the life you envision. If you have questions pertaining to Medicaid planning or Medicaid eligibility, or any other aspect of planning for your future, please contact out offices as soon as possible for a free consultation. The sooner we hear from you, the sooner we can alleviate your worries.

Medicaid Eligibility

To qualify for Medicaid, an individual must satisfy certain requirements including residency, age and/or disability, income limitations, and asset limitations.

Residency Requirement

To qualify for Medicaid in Texas, an individual must be a citizen of the United States and a resident of the State of Texas.

Age/Disability Requirement

To qualify for Medicaid in Texas, an individual must be at least 65 years of age, blind, or is otherwise disabled.

Income Requirement

For an individual or married couple with one spouse applying for Medicaid to qualify in Texas, the taxable income of the applicant cannot exceed $2,250 per month. For a married couple with both spouses applying, the monthly taxable income cannot exceed $4,500. However, there is a Minimum Monthly Maintenance Needs Allowance which allows a couple with only one spouse applying for Medicaid to transfer up to $3,090 of monthly income to the non-applicant spouse which is not counted as the applicant spouse’s income for Medicaid qualification purposes. Taxable income includes wages, social security, pension payments, IRA withdrawals, and any other income that is considered taxable.

Asset Requirement

For an individual or married couple with one spouse applying for Medicaid to qualify in Texas, the countable assets cannot exceed $2,000. For a married couple with both spouses applying, the countable assets cannot exceed $3,000. Countable assets are cash, stocks, bonds, investments, real estate, and other assets which are not personal property (e.g., furniture, car). However, there is an exception for real estate where the individual or couple resides that excludes the home from countable assets so long as the home is valued under $572,000. Additionally, for a couple where only one spouse is applying for Medicaid, the non-applicant spouse can retain up to $123,600 of the couple’s joint assets known as the Community Spouse Resource Allowance.

Managing and Planning for Medicaid

Due to the stringent requirements to qualify for Medicaid, many individuals ultimately find themselves in a situation where they fail to meet the income or asset requirements, but still can’t afford the cost of healthcare that Medicaid covers, such as nursing home fees or fees for personal care services. To avoid this situation, consulting with a Medicaid planning attorney early on can ensure that you qualify for Medicaid when you need it. To plan for Medicaid eligibility, our attorneys can employ several income or asset planning strategies.

Qualified Income Trust

For individuals who do not meet the income requirement but otherwise meet the asset requirement, a qualified income trust (“QIT”) may be employed. With a QIT, the individual deposits income over the income threshold to be used for certain limited purposes. The QIT cannot be used to meet the asset requirement.

Irrevocable Funeral Trusts

Irrevocable funeral trusts (“IFT”) are exempted from countable assets and thus can help meet the asset requirement. To utilize an IFT, the individual or couple transfers money to the trust that is designated to pay for their funeral arrangements.

Spousal Asset Transfer

As identified above, for a couple where only one spouse is applying for Medicaid, the non-applicant spouse may retain up to $123,600 in countable assets. By planning ahead and transferring assets to the non-applicant spouse, the couple can reduce the applicant spouse’ countable assets to help qualify for Medicaid.

Annuities

For a couple with only one spouse applying for Medicaid, annuities can be an effective method of reducing countable assets for the applying spouse. Annuities are complex financial instruments that pay a stream of income for a period of time following an initial lump sum payment from the couple to the company providing the annuity.

Spend Down

In a final effort to reduce countable assets, an individual or couple may attempt to spend the money that limits their ability to qualify for Medicaid. For example, excess money can be spent on their home so long as the value of the home stays below the exempted amount. Similarly, paying down debt can eliminate assets to qualify for Medicaid without having adverse impacts on financial health.

Medicaid Planning Attorney Serving Fort Worth and Tarrant County

The Law Office of Carey Thompson, PC has significant experience with Texas’ specific Medicaid programs including the Star Plus Waiver, the Community First Choice Program, the Day Activity, and Health Services Program, and the Primary Home Care Program. If you have questions pertaining to Medicaid, please contact our offices today.