Medicaid Planning

The challenges of developing a good financial plan for the years when we might be in physical and mental decline are significant. The costs of long-term health care add up rapidly. Furthermore, contrary to what many people believe, Medicare–the government program providing health care services for the elderly–does not cover many long-term health costs. Nor does standard private health insurance. Medicaid planning may end up as a necessary tool of a good long-term health care plan.

Medicaid is commonly seen as a health care program for the poor. But the reality is that the costs of everything from assisted living to hospice and all other expenses associated with our decline can make people from a range of income brackets reliant on government assistance. There are rules to follow though, and a San Antonio Medicaid planning attorney can help you protect your assets while still getting the help you need.

Don’t until the last minute to build a financial strategy around the use of Medicaid for long-term health care expenses. The Law Office of Paul D. Hardy understands Medicaid planning and can help. Call us at (210) 405-1985 today.

The nature of Medicaid as a program for the poor means there are limits on the income a person can earn and still qualify. As of 2022, Texas rules limit that to a little over $2,500 in monthly income and $2,000 per month in assets. For a married couple, the income limit doubles.

Income includes not only employment wages, but any payments from a pension, alimony or a government program. Assets can include stock ownership, bank accounts and any real estate that is not actually lived in by the potential Medicaid beneficiary.

Furthermore, Texas, like all other states has rules in place that seek to prevent people from simply getting rid of all the assets in order to get on Medicaid. Understanding these rules and the alternatives that are allowed, are the key to a successful Medicaid planning strategy.

Look Back & Spend Down

When a person applies for Medicaid, Texas will use a five-year “Look Back” window. What is being investigated are any income or asset transfers that took place in this period. This includes money that might have been given away or assets that were sold for less than their market value.

If the state determines that money or assets were essentially given away, the applicant will not only be denied access to benefits, but penalized in the form of a longer waiting time to become eligible for application again.

Furthermore, the “giveaways” can include money that the applicant doesn’t even think of as being handed out. An example might be payments made to someone who helped you as a caretaker. If there is no written agreement outlining pay and services, it might be classified as a giveaway and subject the applicant to penalty.

One way the “look back” problem can be addressed is through the legal approach of “spend down”. What happens here is that the state looks at the amount of money an applicant has that’s over the income limits. For the purposes of discussion, let’s presume a single applicant has $3,000 in monthly income–or roughly $500 more than the limit.

Medicaid can treat this $500 as essentially a deductible. After an applicant pays the $500 on qualified medical services and documents those expenses, Medicaid benefits can kick in.

A San Antonio Medicaid planning lawyer from the Law Office of Paul D. Hardy can work with you to set up the appropriate legal mechanisms to finance your long-term health care needs. Call us at (210) 405-1985 today.