Medicaid services assist low-income Texas residents pay for medical services including long-term care such as nursing homes. More than two third of people over the age of 65 need long-term care at some point in their lives. Medicaid is a needs-based program. Generally with certain exceptions, recipients can have no more than $2,000 in assets. Certain estate planning techniques exist which may keep you from being required to exhaust all of your resources in order to be eligible for benefits.
Being a relatively healthy individual certainly does not mean you will never need long-term healthcare at some point in your life. The reality is, you don’t have to be sick to need Texas Medicaid services. Here are the answers to some frequently asked questions about Medicaid.
Q. Am I eligible for Medicaid benefits in Texas?
To be eligible for Medicaid, an individual generally can have assets totaling no more than $2,000 excluding certain assets such as a residence and a vehicle. . The Affordable Care Act established a new methodology for determining income eligibility for Medicaid, which is based on Modified Adjusted Gross Income (MAGI). MAGI is used to determine financial eligibility for Medicaid, CHIP, and premium tax credits and cost sharing reductions available through the health insurance marketplace. By using one set of income counting rules and a single application across programs, the Affordable Care Act made it easier for people to apply and enroll in the appropriate program.
MAGI is the basis for determining Medicaid income eligibility for most children, pregnant women, parents and adults. The MAGI-based methodology considers taxable income and tax filing relationships to determine financial eligibility for Medicaid. MAGI replaced the former process for calculating Medicaid eligibility, which was based on the methodologies of the Aid to Families with Dependent Children (AFDC) program that ended in 1996. The MAGI-based methodology does not allow for income disregards that vary by state or by eligibility group, and does not allow for an asset or resource test.
Q. What Medicaid services are available?
Federal, state and local tax funds are used to aid eligible individuals with paying their medical expenses. Generally, Medicaid recipients are only required to pay a small co-payment for covered medical expenses, if anything at all. Medicaid services will typically pay for some in-home services, but only if a physician certifies that home care services are actually needed for specified medical reasons.
Q. How is Medicare different from Medicaid?
One of the primary differences between Medicare and Medicaid is that Medicaid is an income-based or needs-based healthcare assistance program. Also, Medicare benefits are provided by private companies through contracts with Medicare. Medicaid is run by the state. Since Medicare is a federal program, eligibility and benefits are the same all over the country. Although Medicaid is not uniform in every state, it typically covers eligible adults with children living below a certain income level, low income pregnant women, seniors and individuals with disabilities.
Q. Won’t Health insurance cover any long-term care I might need?
Unfortunately, many people miscalculate the actual potential cost of long-term care. The average annual cost of nursing home care, for a semi-private room in a Texas nursing facility, is estimated to be more than $40,000. Add to that the likelihood that nearly half of the Texas citizens age 65 and older need long-term care for approximately five years. For many families that cost can be prohibitive. Medicare and private health insurance will not typically cover all of these costs.
Q. Which assets are considered countable by Medicaid?
The applicant’s assets are divided into two basic categories — countable or exempt. Countable assets could be used to provide for your care and generally include cash, bank deposits, IRA’s, Keogh plans, pension funds and annuities, securities, and cash surrender value of life insurance policies.
Q. Which assets are considered exempt by Medicaid?
Exempt assets, which do not count towards your income or asset limits, usually include your residence, up to a certain value, household items, burial policy or a certain amount of cash set aside for burial expenses, automobiles, and personal items such as clothing and jewelry.
Although the above exempt assets are not counted toward eligibility, they could still be subject to recovery from the Medicaid agency after your death.
Q. Why can’t I just transfer my property to someone else?
Many people who believe they will need long-term care are afraid that they will be forced to give all of their property away before they can qualify for Medicaid benefits. As a result, they mistakenly believe that they can transfer their property to their relatives to reduce their estate, and protect their eligibility for Medicaid. However, a law was passed in 200 established a period of ineligibility, or look back period, that applies to everyone who gives property away at any time within five years of submitting their application for Medicaid benefits. For this reason, timing is very critical and early Medicaid planning may be beneficial.
If you have any questions regarding Medicaid or any other elder law issues, please contact The Vermillion Law Firm, LLC for a consultation either online or by calling us toll-free at (888) 567-5745.