If you are in your retirement years and you foresee the need for you to qualify for Medicaid in the near future you may be concerned about how your need for Medicaid will affect your spouse. Specifically, you may want to know “ How can I protect my spouse when applying for Medicaid in Texas? ” Your concern is well founded given the stringent (and very low) income and asset limits used when determining eligibility for Medicaid. If you included Medicaid planning in your estate plan when you were younger your assets are already protected should be available to provide for your spouse even if you need to qualify for Medicaid. If, however, you did not incorporate Medicaid planning strategies into your estate plan early on, you may still be able to protect some of your assets using the “spousal impoverishment” rules.
Statistics indicate that over half of all seniors will eventually turn to the Medicaid program for help covering the high costs of long-term care. With an average yearly cost of around $80,000 and an average stay of 2.5 years, most people cannot cover long-term care costs out of pocket without losing, or at least significantly diminishing, their life savings. Moreover, since Medicare will not cover long-term care costs, most seniors are forced to look to Medicaid for help. Medicaid will cover long-term care costs; however, you must first qualify for benefits. To do that, you must have both income and assets that fall below the program guidelines. For assets, that means you cannot have countable resources valued at over $2,000. If you do have assets that exceed the program limits you must “spend-down” those assets before Medicaid will help. In the past, this requirement left a “community spouse”, the spouse who remained in the home, without any income or assets on which to depend for day to day living expenses. Fortunately, the “impoverished spouse” rules were eventually enacted, providing a community spouse with some relief and protection.
The spousal impoverishment rules allow a community spouse to keep some income and assets when the other spouse goes into long-term care. In addition, in the State of Texas certain assets are exempt from the asset calculations, including, but not limited to:
A home, regardless of value, if certain conditions are met
One-half of the couple’s combined countable resources, not to exceed the maximum resource amount set by federal law OR the minimum resource amount set by federal law.
If you have additional questions or concerns about Medicaid planning or your Texas estate plan, contact the experienced Texas estate planning attorneys at The Mendel Law Firm, L.P. by calling 281-759-3213 to schedule your appointment today.