Medicaid Myths and Facts

Medicaid Planning Helps Texans in Abilene, Brownwood and San Angelo Pay for Nursing Home Costs

At the Ladyman Law Office for senior planning services, we want to make sure you have all the facts you need so you can afford the cost of nursing home care. You don’t have to spend all of your money paying for nursing home costs.

It’s our job to dispel myths and give you facts to navigate your way through the nursing home financial planning maze. We offer expert Medicaid planning services and senior planning in Abilene, Texas, Brownwood and San Angelo.

Myth #1 – “All the information I need on Medicaid is available from my state Medicaid office.”

Fact: That is like saying everything you need to know about taxes is available from the IRS! Sure your state offices can provide you with general knowledge about Medicaid program requirements, but what you need to know is usually not available from the people employed by the state to process applications. They are not in a position to be your advisor or advocate. They are paid to gather information, not give information. Trust a professional advisor to help address your specific Medicaid and long-term care needs, minimize the financial drain on your savings, and apply for Medicaid Texas.

Myth #2 – “My attorney/CPA/financial advisor will be able to help me with my Medicaid eligibility.”

Fact: Medicaid eligibility is a very complex area that requires specific knowledge of federal and state program requirements and guidelines. You should trust someone with training in Medicaid eligibility, estate preservation and management, and Medicaid forms. Please seek a professional who specializes in Medicaid and senior planning.

Myth #3 – “Medicaid is like welfare, isn’t it?”

Fact: Medicaid was created by Title XIX of Social Security Act and is the healthcare safety net for all senior Americans. Almost three-quarters of the people receiving long-term care in nursing facilities in the state of Texas are Medicaid residents. Many of these people paid for their own care until every penny they had saved was gone (usually spending far more money than necessary) and then qualified for Medicaid benefits. For families and individuals who cannot afford long-term care, Medicaid is often the only choice for financial assistance.

Myth #4 – “We have too much money to qualify for Medicaid.”

Fact: It’s a total myth that a person with more than $2,000 in assets can never qualify for Medicaid benefits. Many assets, such as your home or personal belongings, are not considered by the state Medicaid agency and are exempt from counting toward the $2,000 resource limitation. The value of some of these assets can sometimes be without limit. For married couples, $2,000 is the limit only for assets in the name of the Medicaid applicant – not the applicant’s spouse. Medicaid will currently allow $126,420 to be protected for the healthy spouse still living at home.

Myth #5 – “I can just gift my way to Medicaid eligibility.”

Fact: Federal legislation in 1997 made it a criminal act to make transfers and gifts within three to five years. This law has since been modified, but gifting is still dangerous unless you know what you’re doing. Fortunately, there are still methods of planned gifting (that should be carefully designed) that are allowed.

Myth #6 – “My income is too high to ever qualify for Medicaid.”

Fact: Until 1994, many people could honestly make that statement, but not anymore. The Omnibus Budget Reconciliation Act of 1993 (OBRA ’93) brought about many changes in the eligibility guidelines developed by the Health Care Finance Administration (HCFA). One area that OBRA ’93 addressed is hardship cases where an individual’s income exceeds the state’s income maximum, but is still insufficient to pay privately for nursing home care. The Qualified Income Trust (Miller Trust) is the tool created to help people with high income to qualify for Medicaid. Keep in mind that this specialized income trust is only to solve the problem of too much income – it does not help if you still have too many resources.

Myth #7 – “I can lose my home to claims by the state once I am the recipient of Medicaid assistance.”

Fact: The Estate Recovery Law passed in Texas in 2005 allows the state of Texas to file a claim on the home of a deceased Medicaid recipient. However, there are several exemptions as well as legal remedies that allow a recipient to protect his or her home from claims by the state.

Myth # 8 – “I just can’t afford to have my spouse in a nursing facility.”

Fact: There are many provisions that protect the financial condition of a healthy spouse. The Medicare Catastrophic Care Act of 1988 mandated that spouses of institutionalized individuals should have a protected spousal share of savings (or resources) and income.

Myth #9 – “I don’t have enough money to need a professional advisor.”

Fact: It is important for just about anyone with any money or property to have someone with specialized knowledge and experience help them with important financial decisions and estate planning. A good financial advisor can help you, no matter how much savings or how many assets you have.

Myth #10 – “Carrying the note on real estate can be a great source of income in my retirement years.”

Fact: Homes that have been seller-financed can provide a source of monthly income, but can also cause problems with qualifying for Medicaid benefits. Remember that the financial qualifications for eligibility involve an assessment of both the income and the assets of the applicant. Unfortunately, the note you hold in that real estate arrangement will be more than likely be considered as an income and as an asset. Even though you have sold the home, the note itself could be resold to someone else – making it a source of available cash to you or your spouse.

Plan Now for Long-Term Elder Care

Do you have one minute to see if your life savings are at risk to the extraordinary cost of today’s health care? Most people wait too long to find out. Medicare? Medicaid? Private insurance? Deplete your savings? How will you pay for care? There’s no time better than today to learn from Medicaid specialists in Abilene, Texas, Brownwood and San Angelo. Take just 60 seconds and answer the questions below. Then grade yourself by counting how many “Yes” answers you make. Check your score below to see how you should proceed.

Are you married?
Do you own a home?
Does your monthly income exceed $2,313?
Does the total of your bank accounts and investments exceed $2,000?
Have you (or your spouse) had a significant change in health since you last discussed your finances?
Do you still need disability planning documents such as a Durable Financial Power of Attorney and Durable Healthcare Power of Attorney?
Have you gifted any significant money to family, friends or charity in the last five (5) years?

Number of “Yes” Answers

Zero- You probably don’t need to update your plan. You have either already completed your planning or your estate is modest enough in size not to need planning.

1 to 3- Act now to safeguard your money. A moderate measure of planning or updating of your situation could save you a considerable amount of money.

4 to 7- Making uninformed decisions could cost you your life savings. You have a lot at stake and should have a plan developed by a professional that specializes in senior financial matters. You need long-term care financial planning and guidance.

We urge you to contact one of our friendly representatives so that we can help you protect your estate from unnecessary expenses. Thousands of seniors already have, and they are glad they did!