Misunderstandings About Medicaid

Medicaid coverage is complicated — there’s no way around that simple fact. The rules for Medicaid coverage for nursing home costs are especially complex and many people misunderstand the rules and regulations. There is also a lot of incorrect information circulated about this subject — and the families of elderly people must take care to receive advice about Medicaid coverage only from qualified and experienced elder law attorneys.

Since 1982, the lawyers at Wright Abshire have dedicated their legal practice on guiding elderly people and their families through any and all legal issues that affect a person as he or she ages. Our practice focuses especially on estate planning and Medicaid coverage.

Here, we present a couple of tips about Medicaid coverage — to help dispel some of the myths and counter some common misunderstandings.

Medicaid Tip #1: Caring for an Elderly Spouse at Home

We see many spouses who have taken on the home care of an ailing spouse for far too long a period of time — perhaps out of a sense of duty or a fear that there are not enough financial resources to pay for nursing home care.

If your spouse’s doctor has recommended nursing home care, schedule a consultation with our office to find out whether your spouse can obtain Medicaid coverage to pay some or all of the expense of a nursing home. You may be able to preserve your own health while simultaneously providing a high level of care for your husband or wife.

Medicaid Tip #2: Don’t Confuse Tax Rules With Medicaid Rules

We often hear clients tell us, “I can give away up to $10,000 a year and still qualify for Medicaid coverage, right?” This idea about making gifts or transfers of up to $10,000 per year is an Internal Revenue Service (IRS) rule, not a Medicaid rule.

You may be able to make gifts of up to $10,000 per year without running afoul of the IRS, but Medicaid rules are much more restrictive. If you make such large gifts, you run the risk of preventing eligibility for Medicaid assistance to pay for nursing home care.

Medicaid Tip #3: The Need for a Miller Trust (a Qualified Income Trust or QIT)

Many people have heard of a Miller trust but misunderstand its purpose and how it works. Clients come to us believing they can protect $100,000 in assets by placing it in a Miller trust. This is absolutely false. The purpose of a Miller trust is to protect income, not assets. If you have a high level of assets — for example, real estate or stocks — you need legal advice about the techniques you can use to protect those assets. A Miller trust will not protect assets — only income.

If you do have a monthly income higher than the Medicaid eligibility limit, our attorneys can work with you to find exceptions to the general rule.

Medicaid Tip #4: It’s Never too Late to Apply for Medicaid

Even if your spouse or other family member has been in a nursing home for ten years, using private assets to pay the monthly cost, we will, in most cases be able to protect any assets that remain.

Medicaid Tip #5: Spend-Down Plans

The percentage of people who get poor legal and financial advice about so-called spend-down plans is staggering. Before you begin a spend-down plan to get rid of assets in order to qualify for Medicaid nursing home assistance, please contact our office for a consultation. A poorly devised spend-down plan can do more harm than good, if it doesn’t comply with Medicaid’s spend-down rules.

Contact Wright Abshire for a Consultation

Our lawyers are always available to consult with new clients — either regarding Medicaid planning for the future or an emergency Medicaid situation. To schedule a confidential appointment, send us an e-mail or call us toll-free at 979-314-5331.

From our offices in Bellaire, Texas (a city within Houston) and Carmine, Texas, we represent clients throughout the Houston area as well as statewide. We also represent clients from other states with elderly family members in Texas. Our attorneys can make home, hospital or nursing home visits outside of the Houston area when necessary. And in some cases, many of our legal services can be provided over the telephone for our clients’ convenience.