Elder law Attorney Serving Houston, Texas

Elder law encompasses the legal services needed as people age, including estate planning, long-term care planning, Medicaid qualification, guardianship, and healthcare decision-making. As life expectancy increases and healthcare costs rise, more families face difficult questions about how to pay for nursing home care, assisted living, or in-home health services.  Medicare provides only limited coverage for short-term skilled nursing or rehabilitation and does not pay for ongoing custodial long-term care, which means most families must either pay out of pocket or qualify for Medicaid to cover nursing home costs.

Medicaid provides coverage for long-term care, but qualifying requires meeting strict income and asset limits. In Texas, a single person generally cannot have more than approximately $2,000 in countable assets to qualify for Medicaid long-term care coverage. Certain assets are exempt from this calculation, including your primary residence (with equity limits), one vehicle, personal belongings, and prepaid funeral arrangements, but most other assets count against the limit.

When Should You Start Medicaid Planning?

The best time to plan for Medicaid eligibility is years before you need care, not in a crisis. Texas Medicaid has a five-year look-back period, which means the agency reviews all asset transfers made during the five years before your application. If you gave away assets or sold them for less than fair market value during this period, Medicaid imposes a penalty period during which you’re ineligible for benefits. The length of the penalty depends on the value of the transferred assets.

Advance planning allows you to use legal strategies like irrevocable trusts, asset repositioning, and spend-down techniques to qualify for Medicaid while preserving assets for your family. For example, you might transfer assets into an irrevocable trust more than five years before you anticipate needing care, or you might convert countable assets into exempt assets like home improvements or a more reliable vehicle.

What Are the Medicaid Eligibility Requirements?

Beyond the asset limits, Medicaid applicants must also meet income requirements. However, Texas has a Medicaid program that allows people with income above the standard limits to qualify if they set up a Qualified Income Trust (QIT), sometimes called a Miller Trust. The trust receives your income, uses it to pay your care facility costs, and distributes any remainder according to Medicaid rules.

For married couples, special rules protect the spouse who remains at home (the community spouse) from impoverishment. The community spouse can retain a certain amount of assets and income without affecting the applicant’s Medicaid eligibility. These spousal protections are complex and require careful planning to maximize what the community spouse can keep.

Key Takeaway: Medicaid planning requires advance preparation due to the five-year look-back period. Strategies like irrevocable trusts and asset transfers can help you qualify for long-term care coverage while protecting assets for your family.

If you need or foresee a need for nursing home or assisted living care, start Medicaid planning now. Houston attorney Whitney L. Thompson can evaluate your situation and recommend strategies to protect your assets while qualifying for benefits. Call (281) 214-0173 for a consultation.