As published in the Houston Chronicle, 50 Plus Section, August 2002

Medicaid is the Centerpiece of Elder Law

By Wesley E. Wright and Molly Dear Abshire

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The centerpiece of elder law is Medicaid.   Whether a person will need nursing home care, community-based services, medical assistance only, a care facility for the developmentally challenged, or one of the many other waiver programs, the Medicaid program is of notable interest to many people.

Achieving Medicaid eligibility, however, is frequently a daunting task.  An interested person will face the program's complexity as well as the challenge of overcoming limitations imposed on an applicant's income and assets before achieving eligibility for the benefits.  The Medicaid program itself is a joint program of the federal and state governments.  The majority of the funds come from the federal government and administration is primarily left to each individual state.

One of the most sought after programs offered by Medicaid is nursing facility care which pays for virtually all of the costs associated with that type of care.  In Harris County the average cost of nursing facility care is $3,500 per month.  Add in a few prescriptions and miscellaneous expenses, and a person will pay about $45,000 or more per year.  Dividing this amount into a person's liquid assets will give an indication as to how quickly the person's assets will be depleted if no action is taken.

As a result, many people seek the services of an elder law attorney to help them achieve Medicaid eligibility while still retaining as much of their assets as the law allows.  Under current rules, an elder law attorney may be able to help a couple, for example, attain Medicaid for a spouse in the nursing home while still preserving a house, car and as much as $1.5 million in liquid assets for the spouse at home.  Results will vary depending on many factors including the healthy spouse's income, current interest rates, and rates of return on income-producing properties. 

Single persons who are widowed, divorced or were never married, can also legally preserve assets in a variety of ways, if desired.  Planning should be done with great care and caution and with the guidance of an experienced elder law attorney.  There are many pitfalls waiting for the uninformed which may cause benefits to be lost, assets to be unnecessarily exhausted, or for federal fraud to occur.  Attorneys who devote their practices to Medicaid planning are rare, and the ones who are experienced and are successful at achieving results for their clients are not inexpensive. 

A thorough job will require considerable legal work by the attorney for the client.  If the attorney does the job correctly, he or she must complete a thorough examination of the client=s assets, income and estate planning documents.  The attorney must explore the family dynamics, prepare planning options and help the client implement them.  In some cases, the attorney will need to create income trusts, known as Miller trusts, for applicants who exceed the income cap in Texas or may suggest to the client and then prepare a special needs trust in one or more of a couple's Last Wills and Testaments. Advance directives such as a durable power of attorney, medical power of attorney, living will and declaration of guardian should be considered.  The attorney should also attend the caseworker meeting with the client as well as the appellate hearing, if one is required, to expand the protected resource amount for the spouse at home.  A person should never make transfers of assets without proper legal guidance if that person, or their spouse, intends to apply for Medicaid benefits in the future.  Finally, a person should avoid spending down without the guidance and advice of an experienced elder law attorney.

Wesley E. Wright and Molly Dear Abshire are attorneys with the firm of Wright Abshire in Bellaire.  Wright is board certified by the Texas Board of Legal Specialization in Estate Planning and Probate Law and is certified as an Elder Law Attorney by the National Elder Law Foundation.  Abshire is certified as an Elder Law Attorney by the National Elder Law Foundation.  Nothing contained in this publication should be considered as the rendering of legal advice to any personís specific case, but should be considered general information.