Medicaid Planning

Texas Medicaid Planning and Long Term Care Insurance

Medicaid is a means-tested program that disqualifies persons of a certain net worth and income from benefits. In the past, it was possible in some cases to plan for Medicaid eligibility through certain asset transfers. Living trusts, or those in which the trustor can recover title to the property transferred, were and remain ineffective for reducing a senior's net worth for Medicaid planning purposes. Before 2005, there was a three year lookback period to determine a person's Medicaid eligibility. In other words, many transfers prior to the three year period would not be considered for purposes of Medicaid eligibility, so that a person's eligibility would be figured based on net worth and income as if the transfers made prior to the three year period did not occur.

Since 2005, when the lookback period for Medicaid planning was extended to five years, it has become even more difficult for many to meet the eligibility requirements to qualify for Medicaid. At the same time, many people could not afford the alternative of annual payments sometimes in excess of $50,000 toward in-home care, nursing home care, or a different range of services. Even worse, some estate plans prepared prior to the 2005 legislation may run afoul of the extended lookback period and could result in an unintended denial of Medicaid eligibility.

One answer to paying for long term care for many people could be long term care insurance obtained as early as possible. If you have existing policies, they could be reviewed to determine coverage and exclusion issues, and whether or not they meet your specific needs. The lawyers at McCulloch & Associates can advise you about winning strategies. We can also review any existing estate plan that you might have in place today in order to ascertain the impact of the new five year lookback period or any existing long term care policies for scope of coverage. To learn more about your options with this complex area of elder law, contact McCulloch & Associates.