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You Can Qualify for Medicaid and the State of Texas Cannot Steal Your Home!


Frequently Asked Questions about Medicaid Planning in Texas

MYTH ONE: I’ll have to give the state my home and everything else if I get Medicaid!

TRUTH: The Medicaid Estate Recovery Program (MERP) can make a claim after you pass for repayment of money it paid for benefits received during life. BUT MERP CAN ONLY RECOVER AGAINST PROPERTY PASSING THROUGH PROBATE. Any property which passes outside of probate – like bank accounts with pay on death provisions – is not subject to MERP.


Lady Bird Deeds pass the homestead outside the probate process and avoid MERP for the biggest resource most Medicaid recipients have at death.


There are also exceptions for property passing by probate including:

  • Property passing to the surviving spouse or
  • where an unmarried adult child has been living in the home for more than a year prior to the death of the recipient.


For most people, there is a reason for MERP to apply!


MYTH TWO: I can have nothing if I want to get Medicaid benefits.

TRUTH: Long Term Care Medicaid Benefits do have asset limitations, but significant resources can often be protected. Many items do not count toward the asset limitations, including:


  • The homestead up to $536,000 for a single person, unlimited value for a married couple
  • A car of any value
  • An irrevocable pre-need funeral plan
  • Real property up for sale


A single person can have $2,000 in “countable resources”. With a husband or wife still at home, you can protect up to an additional $115,920 in countable resources. With both husband and wife in a facility, one can get Medicaid regardless of their available assets


MYTH THREE: I can’t get Medicaid because my income is too high.

TRUTH: Any person whose monthly income is insufficient for their care at a nursing facility can meet the income requirements. If your gross monthly income is over $2,130 in 2013, you will be denied Medicaid benefits unless you have a Qualified


Income Trust, sometimes called a Miller’s Trust. A Miller’s Trust works by making income not counted for eligibility purposes. The income deposited into the Miller’s Trust account is simply disregarded when determining eligibility. You still pay your applied income to the facility, but Medicaid will pick up the difference between the income and the cost of care – often thousands of dollars a month.


MYTH FOUR: I can fix my asset problem by giving it to my kids.

TRUTH: Medicaid will assess a transfer penalty for most transfers made for less than fair market value. Medicaid will start the penalty period on the first day of the month in which you have less than $2,000 in countable resources to pay the facility, though you will have to pay privately until the whole transferred amount is paid off.


Medicaid can look back for 5 years for transfers made without adequate compensation.


There are exceptions, including:


  • Transfers between spouses
  • Transfers made to a disabled child or for the sole benefit of a disabled child and
  • Transfers to certain Educational Trust Funds for the benefit of people under the age of 21.


MYTH FIVE: Medicaid is welfare.

TRUTH: Long Term Care Medicaid and STAR+PLUS Waiver are work-based programs. In order to receive these types of Medicaid benefits, you must have paid into the system (either yourself or your spouse) and be eligible for a work benefit such as Social Security, Medicare, or Veteran’s benefits.


MYTH SIX: I can’t qualify because I paid into Texas Teacher’s Retirement, not social security.

TRUTH: If you qualify for Medicare benefits, you can be eligible, even if you didn’t pay into Social Security, Railroad Retirement, or Civil Service.


MYTH SEVEN: I can’t go home with Medicaid benefits.

TRUTH: If you are well enough to go home but still need help in the house, the STAR+PLUS Waiver program can help. STAR+PLUS Waiver is a program that can pay for some in-home health care and modifications to the home. STAR+PLUS can be applied for even if you don’t go into a nursing facility and get Long Term Care Benefits first, but there can be a wait list that way.