Texas Elder Law Series - Introduction
Long term care options divided into three categories: (1) personally financed long term care, third party financed long term care, and government-based assistance. These financially structured concepts identify the strategies that are present in our current environment. That environment it's constantly evolving with our National needs. While this book intends to be a comprehensive overview of the government-based option, Medicaid, one should always consult with an attorney before endeavoring in long-term care planning through government-based assistance.
Whenever one engages the government to pay for her mother’s care, she should always be mindful that the government is really a reflection of our National community. We currently do not live in a society of unlimited resources. Therefore, when the government pays for your mother’s care it is really your neighbor, friends, children, and yourself who is paying for her care. A nation can only survive when each individual member takes responsibility for what he or she is able. While it might be too late for your mother to finance her long-term care, you should attempt to take care of your potential future needs. Within the United States, resources are not distributed equally which means those who are found at the bottom of the economic hierarchy are unable to prepare for long-term care situations. As a country, we believe firmly in loving our neighbor and helping those who stand in need of assistance. The government has put into place one such program for long-term care managed under Social Security laws. In addition, the United States also has a program for veterans, widows of veterans, and their disabled children known as the pension and Aid & Attendance. However, we will spend little time in this book on that program.
In an attempt for comprehensive understanding of Medicaid, this book will be as direct and as simple as possible in order to conveying the ideas that are available. The goal is to focus our main attention on Medicaid and its long-term care which is available in Texas. While some of these concepts will apply to most states, each state runs its own Medicaid Program under the direction given through federal law.
In order for your mother to qualify for Medicaid nursing home care or a waiver program, she must meet three criteria: first, she must have a medical necessity for which an individual seeks government help; second, she must meet income requirements in order for the government to assist her; third, her assets must be below the required amount set forth under Medicaid rules.
While most people who are reading this section are attempting to avoid the Medicaid estate recovery program period a few may wish to repay Medicaid after they pass away. If you desire that Medicaid recover as much assets from your estate after you pass away, then the following are benefits you receive buy qualifying for Medicaid even though Medicaid will be paid back after you pass away. Qualifying for Medicaid will have the following benefits:
(1) Medicaid pays about 15% to 20% less for most services than you would have to pay privately.
(2) Eligibility for a Medicaid program that pays for prescription medications (such as nursing home Medicaid or the Community Based Alternatives program) qualifies you for membership in a Medicare Part D plan that pays for such medications, without paying a premium.
(3) It may be many years until your surviving family members have to pay back Medicaid, and no interest is charged on this kind of "loan."
(4) It is possible that your estate might avoid estate recovery because your beneficiaries have taken steps to assist the decedent which lowered the cost of care.
As an attorney it is not my job to determine whether or not it is right or wrong per person to take Medicaid. It is my job to provide the services which my client seeks which are within the law.
You might hear from friends that it is a crime to transfer your mother’s assets. What they are generally referring to is a law which became effective January 1, 1997, it purportedly became a crime to knowingly and willfully dispose of assets in order for an individual to become eligible for Medicaid, if disposing of the assets results in the imposition of a period of ineligibility. Enforcement of that law has been enjoined in New York State Bar Association v. Reno, 97-CV-1768-TJM-DRH, (S.D.N.Y.). To this day no one has been criminally charged for transferring one’s assets to become eligible for Medicaid.
My last concern involves financial advisors. Many advisors have formed great relationships with their clients over decades of time. One of the hardest phone calls to receive is from the daughter of one of their clients telling him or her that all of mom’s money has to be moved. Many times, these advisor step in the way of planning to keep assets under management. Please be understanding when they push back, it is usually out of their desire to retain a client. For each hundred thousand dollars held under management by a financial advisor is usually a thousand dollars a year revenue. So, moving money can cost an advisor tens of thousands of dollars over a decade.