What are some strategies to getting under the Medicaid resource limit?
It is possible to qualify people for nursing home Medicaid who have several hundred thousand dollars. Strategies often used include the following:
- Shifting Medicaid countable resources into excluded resources (i.e. acquiring assets or paying down debt on assets that are excluded for Medicaid eligibility purposes);
- Requesting expansion of the protected resource amount when a married couples’ combined gross income is below $2,931 per month (in 2014);
- Purchasing a Medicaid qualified immediate annuity in order to convert a countable resource to income in the name of a Medicaid ineligible spouse; and
- Gifting countable resources.
- Several factors determine which strategy or strategies should be pursued. These considerations include:
- Whether the Medicaid applicant is single, married with an ineligible spouse, or married and both whom are applying for Medicaid;
- Income, gift and capital gain tax consequences of various options;
- The current and anticipated financial, physical and/or mental limitations of the Medicaid applicant and dependents;
- The presence or absence of trust within the family;
- The existing estate plan and/or desired changes thereto; and
- The impact the Medicaid Estate Recovery Program (MERP) will have, if any.
CAUTION: Medicaid planning is the practice of law. It is a criminal offense for anyone who is not a licensed attorney in Texas to offer or accept a fee for providing assistance in applying for Medicaid services. Numerous financial advisors and insurance agents (sometimes working in conjunction with an uninvolved lawyer) offer to provide Medicaid planning services. While they may be successful in obtaining Medicaid services, they often pursue strategies that are not in their clients’ best interest, either out of ignorance or greed.
Other Frequently Asked Questions
- Can a family member be paid for services provided to the Medicaid applicant?
- Can I gift or transfer assets for less than fair value and receive Medicaid nursing home benefits?
- Does Medicare cover nursing home care?
- How is medical necessity determined for Medicaid nursing home care?
- How is the Medicaid applicant’s home protected against the Medicaid Estate Recovery Program (MERP)?
- How much is the Medicaid copayment to the nursing home?
- I thought you could gift a certain amount each year without penalty?
- What are some strategies to getting under the Medicaid resource limit?
- What are the basic eligibility requirements for long-term care Medicaid in Texas?
- What do Medicaid nursing home benefits cover?
- What if medical necessity is denied?
- What is a Medicaid transfer penalty and how is the penalty calculated?
- What is a Qualified Income Trust (QIT)?
- What resources are excluded for purposes of determining Medicaid eligibility?