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Medicaid Terminology in Texas for Nursing Home Medicaid and Medicaid at Home

A person who requires skilled nursing care may need to apply for long-term care Medicaid services. As with most government programs, Medicaid comes with specialized terminology. Medicaid is federally- and state-financed but managed at the state level, which means that the rules in Texas apply only in Texas. Long-term care Medicaid, also called nursing home Medicaid, is one of dozens of Medicaid programs in Texas. A person meeting the eligibility requirements may receive Medicaid in a skilled nursing facility or at home.

Long-term care Medicaid services provided at home and for some individuals in assisted living facilities is provided under a managed care system. The program was formerly called “Community Based Alternatives,” and is now the “State of Texas Access Reform Plus (STAR+PLUS) Waiver” program. Demand for Medicaid “in the community” is high; therefore, the State maintains a waiting list, referred to as an “interest list.”

The person applying for Medicaid is the “applicant.” Medicaid is a “means-tested” program, meaning that an applicant’s income and assets are tested against set limits. For example, an applicant’s gross monthly income in 2024 must be below $2,829. Applicants whose incomes exceed this limit can establish a “Qualified Income Trust,” also known as a “Miller Trust,” which if done correctly allows the person to be eligible regardless of their monthly income. After a person is certified to receive Medicaid benefits, their income, after certain deductions are made, is paid to the nursing home as a “co-payment” (formerly referred to as “applied income”).

A single applicant’s countable resources must be below $2,000. “Countable resources” refers to the value of the assets of a single applicant (if married, countable resources greater than $2,000 can be excluded). Some assets, such as a person’s home, are “excluded resources” that are not counted toward the limit.

Giving away assets within the “look-back period” to qualify for Medicaid results in a “transfer penalty” unless an exception applies. Giving away assets means any transfer to a person, charity, or other entity for less than fair market value. The “look-back period” for long-term care Medicaid is the 60 months prior to filing a Medicaid application. For gifts made during the period, the “transfer penalty” is a period of ineligibility calculated by dividing the total amount of the gift or gifts by the average monthly cost of nursing home care set by the State.

When a married person applies for Medicaid, several special rules apply, leading to additional terminology, beginning with how the State refers to each spouse. The “institutionalized spouse” is the person who is applying for Medicaid benefits. The “community spouse” is the institutionalized person’s spouse who is living at home or some other setting in which he or she is not receiving medical care or services. “Institutionalized spouse” is used even when that person is receiving Medicaid at home under the STAR+PLUS Waiver program.

The community spouse’s resources are “deemed” to (counted against) the institutionalized spouse who is applying for Medicaid, meaning that the State counts both spouses’ resources together for the purpose of determining “countable resources.” However, when there is a community spouse not seeking Medicaid, a portion of the couple’s combined countable resources is protected for the community spouse. This is known as the “spousal protected resource amount.”

Medicaid recipients must re-apply for benefits every year. This recertification process is sometimes referred to as an “annual administrative renewal process” for a “redetermination of eligibility.” Redeterminations are also needed when there has been a change in circumstances before the one-year mark.

While this article defines some Texas Medicaid terms, the eligibility rules are complex and must be understood in conjunction with one another. Medicaid planning should be handled by an attorney who specializes in the area.

Nothing contained in this publication should be considered as the rendering of legal advice to any person’s specific case but should be considered general information.