Medicaid

Is It Time to Begin Medicaid Planning?

If your family needs to begin long-term healthcare planning for an older relative, or if it’s time to begin long-term healthcare planning for yourself, the first steps to take are learning the facts about Medicaid and discussing your situation with a Waco Medicaid planning attorney.

It is important to know the difference between the Medicare and Medicaid programs. Medicare is a federal health insurance program for those who are 65 and older. It can provide limited, short-term medical coverage, but the Medicare program provides little long-term healthcare assistance.

What Does Medicaid Provide?

Medicaid – a combined federal and state medical assistance program – was established in 1965 and expanded in 2010. Medicaid provides coverage to more than 85 million elderly and disabled persons across the U.S. It offers long-term healthcare coverage that Medicare does not provide.

There is a means test, so not everyone will qualify for Medicaid, but you may not have to spend down all your assets in order to obtain the Medicaid benefits you may need. A Waco Medicaid planning lawyer can help you qualify by using one of several planning strategies

What is STAR+PLUS?

In Texas, STAR+PLUS is the state-managed Medicaid program for adults age 65 and older (and for disabled adults). Benefits include Medicaid healthcare and long-term services and support through a plan you choose. STAR+PLUS usually pays for services including but not limited to:

1. home healthcare, nursing home care, and hospice care
2. annual visits to your doctor
3. chiropractic, speech, vision, dental, hearing, and podiatry services
4. immunizations, x-rays, and prescriptions
5. mental health services, physical therapy, and occupational therapy
6. surgeries, hospital care, and emergency services

Why is Advance Medicaid Planning So Important?

Everyone knows that healthcare costs are high. The average cost of a private room in a Texas nursing home, for example, is more than $7,000 a month. For a semi-private room, the cost exceeds $5,000 a month. Medicaid can help, but you need to plan for Medicaid in advance.

Along with the requirements and income levels listed above, Medicaid enforces a five-year “lookback” period. Any assets incorrectly transferred or moves in the five years before you apply will be considered when the state determines your eligibility for Medicaid benefits.

No one can know what the future may bring. That’s why, even if you’re still a relatively young adult, it’s best to begin your Medicaid planning right away with the advice and assistance of a Waco Medicaid planning attorney.

How Can You Protect Your Assets and Still Qualify for Medicaid Benefits?

If your income exceeds Medicaid’s income limit, a Texas Medicaid planning lawyer may recommend one of several options for helping you maintain your Medicaid eligibility.

Your lawyer may recommend preparing a Qualified Income Trust (also called a “Miller” Trust) or a Medicaid Asset Protection Trust. With a Qualifying Income Trust, any income you earn beyond the monthly Medicaid limit is moved into the trust to maintain your Medicaid eligibility.

Giving away some of your assets – “gifting” – may also be an effective planning strategy, but your gifting must be guided by an attorney’s advice. Otherwise, you could find yourself in a situation where you’ve given away assets but you are still not eligible for Medicaid benefits.

Frankly, Medicaid’s five-year lookback period means that you should establish a trust and/or plan your donations and gifts as soon as possible. However, establishing a trust may not be the right option for you. There is no single approach to Medicaid planning that is right for everyone.

Why Should You Work With an Attorney?

A Waco Medicaid planning lawyer will discuss all of your alternatives for Medicaid planning. Your lawyer will recommend the options that are right for you and prepare a personalized Medicare plan that protects your assets and meets your healthcare needs.

Specifically, your planning attorney will work with you to prepare a plan that reorganizes the legal ownership of your assets and ensures that a significant portion of your assets will not be counted toward your eligibility for Medicaid benefits.

If you prepare a trust, your lawyer can ensure that the language of the trust is easy to understand and that the trust complies with both federal and state law. Your lawyer will also ensure that nothing is overlooked and that you have thoughtfully and thoroughly considered your options.

Who Can You Depend on for Medicaid Planning Advice?

Your Medicaid planning attorney will also help you review your plan on a regular basis and help you keep it updated. Occasionally, you may need to revise your Medicaid plan due to changes in the Medicaid regulations or due to changes in your own family, personal, or financial situation.

Peace of mind about the future starts with contacting the right planning lawyer. But how can you locate a lawyer who provides the insights and planning advice that you need? Rainey & Rainey will help you and your loved ones with every aspect of your Medicaid planning.

To learn more or to begin the Medicaid planning process now, contact the offices of Rainey & Rainey by calling 254-752-8644 (in the Waco area) or 512-598-9005
(in or near Georgetown). We work for families and clients across the state of Texas, and we are ready to work for you.

Should You Consider Medicaid Planning?

A Waco Medicaid planning attorney works with older people and their families to preserve and protect the older person’s income, assets, and properties, and to make sure that the older person remains qualified for Medicaid benefits.

Without proper Medicaid planning, healthcare costs can rapidly take an older person’s income and assets. Proper Medicaid planning – with advice from a Waco Medicaid planning lawyer – can help you cover the costs of the long-term medical care that you may eventually require.

However, it may be difficult for some to meet Medicaid’s requirements. Your household income and assets cannot exceed certain thresholds, and you moving assets out of your name within the five-year “look-back” period can cause a penalty period delaying your qualification for benefits. 

What is a Look-Back Period?

To qualify for Medicaid, your assets and income may not exceed the established limit. Medicaid’s five-year look-back period is intended to prevent Medicaid applicants from transferring or giving away their assets in order to meet Medicaid’s asset limit.

The state will look back for five years to determine if you have transferred assets (including transfers made by your spouse). Thus, you need to begin planning for Medicaid long before you may require long-term care.

The five-year look-back period begins on the date you apply for long-term care under Medicaid. A Texas resident who applies for long-term benefits on January 1, 2024, has a look-back period extending back to December 31, 2018. All transactions between these dates may be reviewed.

What Transfers Are Violations of the Look-Back Rule?

Transactions within the five-year Medicaid look-back period could trigger penalties. Such transactions include:

1.  cash gifted to a family member
2. a house transferred to a family member
3. cash or items donated to charities
4. collectibles or properties sold for less than their market value

Even after someone is on Medicaid, if a Medicaid recipient comes into money (for example, an inheritance) and gives some or all of it away, that gifting may violate the look-back rule.

How Are Violations of the Look-Back Rule Penalized?

Let’s say you are a Texas resident who applied for long-term Medicaid care on January 1, 2024. Within the five-year look-back period, you sold a home to your son or daughter for $20,000, well below its market value of $120,000, and you gave a grandchild $15,000 for college.

This means that you have transfers amounting to $115,000. As of 2024, the “penalty divisor” in Texas is $242.13 per day, so for every $242.13 gifted (or sold below market value), you are penalized with a day of ineligibility. This comes to about one month of disqualification for every $7,339 given away.

Thus, in total, you would be penalized more than 15 months for gifts of $115,000 ($115,000 ÷ $242.13 = 474 days).

Are There Any Exceptions to the Look-Back Rule?

Several exceptions to Medicaid’s five-year look-back rule allow you to transfer particular assets without a penalty. Assets may be transferred to a spouse who is not applying for Medicaid. The following may also be transferred without penalty:

1.  assets given away or transferred to benefit your child if that child is legally blind or permanently disabled (including a trust you may establish for the child)
2.  your home, if it is given to your child who is under 21 years old
3.  your home, if it is transferred to a sibling who is part owner of the home and who has resided there for at least one year prior to your admission to a nursing home
4.  your home, if it is transferred to your adult child who has acted as your caregiver for two or more years before your admission to a nursing home

What Can You Do if You’ve Breach the Look-Back Rule?

If you have made gifts within Medicaid’s five-year look-back period, you may still be able to qualify for long-term Medicaid benefits. If you can recover your gifted assets, the penalty period will be reduced.

If you are unable to recover your gifted assets, you may apply for an Undue Hardship Waiver. To receive an Undue Hardship Waiver, you’ll have to prove that your efforts to recover your assets failed and that if you don’t receive benefits, you will face considerable financial hardship.

Can You Transfer Any Assets Without Violating the Five-Year Rule?

There are several ways that you can reduce your assets without violating the five-year look-back rule.

Medicaid Compliant Annuities also spend down assets without violating Medicaid’s look-back rule. These annuities convert a lump sum of cash into a monthly income stream for the applicant, lowering his or her assets for Medicaid eligibility.

Assets may also be reduced without breaching the look-back rule by paying off debts, spending for modifications (such as widened doorways and wheelchair ramps) to make your home more accessible, and establishing an irrevocable trust that pays funeral and burial expenses in advance.

Let Rainey & Rainey Help You Qualify for Long-Term Medicaid Benefits

In Texas, your Medicaid planning should be handled by a Waco Medicaid planning attorney who is familiar with Medicaid’s complicated eligibility requirements. The attorneys at Rainey & Rainey advise and advocate on behalf of the elderly and their families throughout the state.

The entire Rainey & Rainey legal team works tirelessly to help the elderly in this state receive the long-term Medicaid benefits they need.

To learn more about Medicaid planning or to begin the planning process, to apply for long-term Medicaid benefits, or if your application for Medicaid benefits has been denied, schedule a meeting with a Waco Medicaid planning lawyer by calling the offices of Rainey & Rainey – today – in Georgetown at 512-598-9005 or in Waco at 254-752-8644.-0987.

The one-year deadline for nursing home residents on Medicaid to spend down their first round of stimulus checks is here, but they may have a little extra time.

In March 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act authorized $1,200 stimulus checks to most Americans, including Medicaid recipients. Another round of $600 checks was authorized in December 2020, and $1,400 checks were ordered in February 2021. The stimulus checks are not considered income for Medicaid recipients, and the payments have been excluded from Medicaid’s strict resource limits for 12 months.

While the one-year deadline for spending down the first round of checks is here, another COVID-19 bill gives beneficiaries more time. The Families First Coronavirus Response Act passed in March 2020 provides that if you were enrolled in Medicaid as of March 18, 2020, the state cannot terminate a recipient’s benefits even if there is a change in circumstances that would normally cause the benefits to be stopped. The law states that the recipient’s Medicaid coverage must continue through the end of the month in which the Secretary of Health and Human Services declares that the public health emergency has ended. The public health emergency is set to end April 20, 2021, but it will likely be extended.

While Medicaid recipients may have a little extra time, they shouldn’t delay too long in spending down the money if it has pushed them over the resource limit, which is $2,000 in most states. The following are examples of what a Medicaid recipient may be able to spend the money on without affecting their eligibility:

• Make a payment toward paying off debt.
• Make small repairs around the house.
• Update personal effects. Buy household goods or personal comfort items. Buy a new wardrobe, electronics, or furniture.
• Buy needed medical equipment, see a dentist or get your eyes checked if those items aren’t covered by insurance.

While Medicaid recipients usually cannot gift money or assets and remain eligible for benefits, recipients in at least some states should be able to make gifts from the stimulus money during the first 12 months following receipt. If you have questions about how you or a family member in a nursing home can spend the money, contact your attorney.

Qualifying for Medicare hardly means free health care — there are still premiums and deductibles. However, people who qualify for both Medicare and Medicaid (called “dual eligibility”) receive help paying their out-of-pocket costs.

Medicare is a federal program available to anyone 65 or older. It consists of four major parts, each of which have premiums and co-pays associated with them:

• Part A covers hospital stays and some limited nursing home stays
• Part B covers office visits, physician fees, medical equipment, home care, and preventative services
• Part C (called Medicare Advantage) permits Medicare beneficiaries to receive Part A and B benefits from private insurance companies
• Part D covers prescription medications

Medicaid is a joint federal and state program that provides health insurance to low-income adults, children, and people with disabilities. It is also the primary method of paying for nursing home care. To qualify for coverage, applicants must have limited assets and income.

To be considered dually eligible, beneficiaries can be enrolled in either Medicare and full Medicaid or in Medicare and one of Medicaid’s Medicare Savings Programs. Medicare Savings Programs are state programs, run through Medicaid, that provide help paying for Medicare premiums. When Medicare and Medicaid coverage overlap, Medicare always pays for the services first. If Medicare doesn’t cover the full cost, then Medicaid may cover the remaining cost. Medicaid may also cover some costs that Medicare does not cover, like long-term nursing home care.

The benefits available to dual eligible beneficiaries depend on which Medicaid program the beneficiary is enrolled in:

• Full Medicaid. Beneficiaries receive full Medicaid coverage. Because Medicaid is a state-run program, additional benefits can vary by state. Some states may pay Medicare’s Part B premiums. In addition, beneficiaries do not have to pay more than the amount allowed under the state’s Medicaid program for services by Medicare providers.
• Qualified Medicare Beneficiary (QMB) Program. Beneficiaries receive help paying Part A and Part B premiums, deductibles, coinsurance, and copayments.
• Specified Low-Income Medicare Beneficiary (SLMB) Program: Beneficiaries receive help paying Part B premiums.
• Qualifying Individual (QI) Program: Beneficiaries receive help paying Part B premiums but help is limited on a first-come, first-served basis.
• Qualified Disabled Working Individual (QDWI) Program. Pays Part A premiums for certain disabled and working beneficiaries under 65 who meet certain income and resource limits set by their state.

Medicaid long-term care benefits traditionally pay mainly for nursing home care, but the federal government can grant “waivers” to states allowing them to expand Medicaid to include home and community-based services. The downside is that receiving care in a nursing home is an entitlement, while getting care at home is not.

Medicaid is a joint federal-state program that provides health insurance coverage to low-income children, seniors, and people with disabilities. In addition, it covers care in a nursing home for those who qualify. Each state operates its own Medicaid system, but this system must conform to federal guidelines in order for the state to receive federal money, which pays for about half the state’s Medicaid costs. (The state picks up the rest of the tab.) A Medicaid waiver allows states to waive some of the federal rules with the intention of providing services to individuals who wouldn’t normally be covered by Medicaid. The waiver must be approved by the federal government.

The most common type of Medicaid waiver expands Medicaid to cover home care to individuals who need a high level of care, but who would like to remain at home rather than enter a nursing home. Care that may be provided by a waiver includes personal attendants, home health aides, medical supplies and equipment, respite care, counseling services, transportation, homemaking services, hot meal delivery, and more.

Each state sets up its own waiver program, so the rules and requirements vary widely. Usually, to qualify an applicant must need a level of care similar to what is needed to qualify for Medicaid coverage in a nursing home. The point of the waiver is to allow an individual who would normally need nursing home care to remain at home, which is typically a far less costly form of care. States may also target different health conditions, such as HIV, Alzheimer’s disease, diabetes, cystic fibrosis, among others. Each state also sets its own income and asset levels for its waiver programs, which may vary from state to state, and may be different from the income and asset levels used for Medicaid coverage of nursing home care.

The downside of state waiver programs is that waivers are not an entitlement, meaning that states are allowed to limit the number of people who qualify for services under a waiver. Just because an applicant meets the criteria for eligibility does not mean the applicant will be approved for the services. As a result, waitlists for filled programs can run for months or years.

To find and apply for a waiver program in your state, contact your state Medicaid office.

Medicaid law provides special protections for the spouses of Medicaid applicants to make sure the spouses have the minimum support needed to continue to live in the community while their husband or wife is receiving longterm care benefits, usually in a nursing home.

One of the most important protections is the “community spouse resource allowance” or CSRA. It works this way: if the Medicaid applicant is married, the countable assets of both the community spouse and the institutionalized spouse are totaled as of the date of “institutionalization,” the day on which the ill spouse enters either a hospital or a long-term care facility in which he or she then stays for at least 30 days. (This is sometimes called the “snapshot” date because Medicaid is taking a picture of the couple’s assets as of this date.)

In order to be eligible for Medicaid benefits a nursing home resident may have no more than $2,000 in assets (an amount may be somewhat higher in some states). In general, the community spouse may keep one-half of the couple’s total “countable” assets up to a maximum of $128,640 (in 2020). This is the community spouse resource allowance (CSRA), the most that a state may allow a community spouse to retain without a hearing or a court order. The least that a state may allow a community spouse to retain is $25,728 (in 2020).

Example: If a couple has $100,000 in countable assets on the date the applicant enters a nursing home, he or she will be eligible for Medicaid once the couple’s assets have been reduced to a combined figure of $52,000 — $2,000 for the applicant and $50,000 for the community spouse.

Some states, however, are more generous toward the community spouse. In these states, the community spouse may keep up to $128,640 (in 2020), regardless of whether or not this represents half the couple’s assets. For example, if the couple had $100,000 in countable assets on the “snapshot” date, the community spouse could keep the entire amount, instead of being limited to half.

See also “Medicaid’s Attempt to Ensure the Healthy Spouse Has Enough Income: The MMMNA”