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Planning for nursing home costs with Medicaid

If you or a loved one is planning for nursing home care, you may find the cost of long term care alarming. Many people turn to government assistance through Medicaid to help pay for care. In Texas, some refer to this program as STAR+PLUS. The Medicaid laws and application process can be very frustrating and confusing, but planning ahead with a trusted professional can make a big difference. Here are a few terms you should know when applying for long term care Medicaid assistance in Texas.


Asset limits

In order to be eligible for Medicaid, you may only have $2,000 in assets at the time you apply, if you are single. Some assets don’t count, such as your homestead and one car. Like many financial thresholds, the amount can change over time, so you should always check with a professional regarding these numbers to make sure you have current information. Be aware that requirements are different for married couples.

Transferring property

You may be tempted to start giving away your assets in order to meet the asset limits, but beware that the government looks back five years to see what sort of transfers you made. If you gave away money or property in that time frame, it can count against you when you apply, unless the transfer falls into some narrow exceptions.

Spending down your assets

Medicaid laws do allow you to spend your money on certain items for yourself or your home in order to “spend down” your assets to meet the asset limit. You should work with a professional to make sure you are spending your money on allowed items and in an acceptable way.

Income and qualified income trusts (QIT)

Even if you spend down to the asset limit, you may still have too much income to qualify for Medicaid. You cannot “spend down” your income in Texas, but you can put the excess money into a special trust, called a qualified income trust (QIT). This trust has many specific requirements and limitations, but you can use it to pay for some unmet needs of the Medicaid recipients.

The decision to enter a nursing home is difficult enough without the added stress of deciphering complicated Medicaid rules. This information should at least help you understand some of the terms you will come across during the application process.

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