Texas Medicaid Application Process

Medicaid was designed as a healthcare program intended for those with limited income and assets. While many low-income families qualify for types of Medicaid benefits in their younger years, applying for Medicaid benefits is especially important for those who may need long-term care in the future. This is because Medicare does not cover most long-term care costs, which are incredibly high. Thus, even if you have significant assets, the monthly cost of long-term care can quickly erode a substantial life’s savings. However, qualifying for Medicaid benefits raises many challenges, and making a prohibited transfer can result in an eligibility penalty. At the Houston Medicaid Planning law firm of McCulloch & Miller, PLLC, we help clients through the Medicaid application process. With our help, you can better understand all your long-term care options and how to effectively plan ahead for when it’s time to apply for Medicaid.

Medicaid is a federal healthcare program that is administered on the state level. Thus, every state’s Medicaid system is a little different. For individuals reaching retirement age, perhaps the most important benefit of Medicaid is that it covers the cost of long-term care in nursing home facilities.

According to recent estimates, seven out of ten people will need long-term care at some point in their lives. The annual cost of a private room in a Texas nursing home is more than $78,000. This puts the cost of long-term care beyond the reach of most Texas families. However, even if your family has the means to pay for long-term care, you may want to preserve those assets for future generations. Medicaid planning allows you to legally and ethically arrange your assets so that you can qualify for Medicaid without needing to first spend down all your assets.

To qualify for Medicaid benefits, you must either have a qualifying disability, care for a disabled child, or be at least 65 years old. In addition, you must have a monthly income of less than $2,523. However, this is the 2022 income limit; the monthly income cap changes each year. Finally, you cannot have more than $2,000 in qualifying assets. Not every asset counts towards the asset limit; for example, applicants may be able to keep the following assets and still apply for Medicaid:

• A primary residence (up to $636,000 in equity);
• A vehicle;
• Wedding rings;
• A burial plot; and
• Some personal property.

Importantly, there is a five-year lookback period for all transfers. This means that once you apply for benefits, Medicaid will review all transfers over the preceding five years. If you made a prohibited transfer, you will be prevented from applying for Medicaid for a certain period of time. The length of the eligibility penalty depends on the value of the prohibited transfer. For example, in 2022, every $237.93 in prohibited transfers results in a one-day penalty.

However, there are ways to effectively navigate the Medicaid planning process to protect assets and income without risk of penalty. For example, a Qualified Income Trust, or Miller Trust as they are often called, can be used to exclude certain streams of income when applying for Medicaid.

If you are approaching retirement age and want to learn more about Medicaid benefits, reach out to the experienced Houston Medicaid crisis and pre-planning attorneys at McCulloch & Miller, PLLC. We have more than 35 years of experience helping individuals and families from all backgrounds and walks of life navigate the Medicaid application process. We also offer consultations to all prospective clients, during which we will answer your questions and explain how we can help. To learn more, and to schedule a consultation today, call 713-333-8900. You can also reach us through our online contact form.