Medicaid Update

UPDATE ON THE LAW NURSING HOME MEDICAID RULES AFTER THE 2003 LEGISLATURE by K.T. WHITEHEAD, CERTIFIED ELDER LAW ATTORNEY, serving San Antonio since 1992 3004 Nacogdoches San Antonio, TX. 78217 210-930-4300 BASIC RULES The general rules have not changed. To qualify for Medicaid a person must: ~ have medical need of twenty-four hour nursing care. ~ have less than $2000 in countable assets. There are exempt assets such as the homestead, certain family businesses and a car. Countable assets generally include bank accounts, stocks, bonds and other investments. ~ have an income of less than $1,692. If one's income is over $1692, the income cap, then one must have a Qualified Income Trust (QIT) also known as a Miller Trust. This trust legally lowers one's income under $1692. The trust must be in place during the month when one intends to qualify for Medicaid. While these are the basic rules, often with careful planning, especially in the case of a couple, resources may be protected. Some often used planning methods include expanding the personal resource allowance for spouse in the community; paying debts; investing in the homestead; certain types of burial policies and other exempt resources. All of these ideas should be explored with an attorney and tailored to a specific situation. No one solution fits everyone. WHO SHOULD SEEK ADVICE The most common error is waiting too long. Early planning for potential Medicaid eligibility is critical. It is best to seek advice when one is not in crisis. This affords the most opportunities. Those who think they may need nursing home care at some point would be wise to have a long term care and Medicaid review with their attorney. Should a person become ill, it is even more important to immediately seek legal advice and planning for Medicaid and other public benefits. MEDICAID ESTATE RECOVERY LAW The Texas legislature, as part of its most recent budget act, enacted a lien law. For almost ten years, Texas has been one of three states that has ignored the federal mandate to seek reimbursement for funds that are paid by Medicaid on behalf of the nursing home resident. In the past, this meant that once someone had qualified for Medicaid, exempt assets were safe from government liens and claims for reimbursement in Texas. However, Medicaid now has authority and indeed is mandated by the Texas Legislature to seek dollar-for-dollar reimbursement for each dollar Medicaid pays for nursing home care. Thus, it is even more important to plan for the protection of assets now and after the nursing home resident's death, especially if there is a spouse living in the community. In other states, lien laws work like this: if one receives Medicaid benefits for nursing home care in the amount of $10,000.00 at the death of the recipient, Medicaid must seek $10,000.00 from the person's estate. Medicaid can make claims on assets that might have been protected during the nursing home resident's life, like the homestead, which may lose its protection on the nursing home resident's death. Medicaid may place a lien on the assets during the person's lifetime. Then collect at the nursing home resident's death if the homestead does not otherwise qualify as a homestead. The Governor has signed this bill. It is now up to the Texas Department of Human Services to create the rules for implementing the lien law. Homesteads are no longer absolutely protected. It will be even more important for nursing home residents and their families to seek solid legal advice to protect assets from the lien rules when qualifying for Medicaid. MEDICAID PLANNING Each year, the rules for Medicaid become more complex. Unfortunately, with the budget cut backs, local Medicaid caseworkers carry larger loads. This combination makes it more and more difficult for the average person to simply apply for Medicaid. Those who plan to apply should seek the advice of an attorney. It is illegal for non-attorneys to practice before the Department of Human Services. Medicaid planning involves more than finances. It includes solid estate planning, planning for incapacity, and review of the legal options available to the Medicaid applicant. Each plan must be tailored to the individual person. Just as each person is unique, so is each Medicaid plan. Families with someone entering a nursing home should seek the help of qualified attorneys. Some factors that may influence plans include the family situation, multiple marriages, and children with special needs who are also receiving benefits. All plans should be for the nursing home resident's benefit, and not simply to protect inheritance for the nursing home resident's heirs. ESTATE PLANNING A good Medicaid plan often involves revising the nursing home resident's, and their spouse's, estate planning. Simple Wills may no longer be appropriate. WHERE TO GET ADVICE People often shy away from attorneys but this is one area where only an attorney can give you complete advice. Good legal advice can save thousands of dollars. Certified Elder Law Attorneys have passed a national exam which includes knowledge about public benefits. The Elder Law Certification is recognized but not certified by the Texas Board of Legal Specialization. It gives the public assurance that the professional they are consulting has the background necessary to advise them. UPDATE ON THE LAW is provided to you by © June 8, 2003, K.T. Whitehead, Certified Elder Law Attorney. K.T. has been practicing in San Antonio since 1992. To receive additional copies of this newsletter or permission to reprint portion please contact K.T. Whitehead 3004 Nacogdoches San Antonio, TX 78217 210-930-4300