Medicaid Planning

The Difference Between Medicare and Medicaid

Published on: August 31, 2022 | By David W. Miller

Medicare and Medicaid have similar names but are two completely separate government health insurance programs. Understanding the difference can help you and your family plan for aging and retirement.

What is Medicare?

Medicare is a program administered by the federal government—the Centers for Medicare & Medicaid services—that is essentially available to anyone, regardless of income. If you are over 65 years of age or are younger and have a specific disability, you may qualify for Medicare. People covered under Medicare pay into a trust from which medical bills are paid. Most long-term care costs are not covered under Medicare, making it difficult for aging individuals and their families to pay for care facilities or long-term rehabilitation.

What is Medicaid?

Unlike Medicare, Medicaid is administered by individual states, such as Texas. It is catered to serve low-income people at any age, and also covers the costs of long-term care in nursing home facilities. In Texas, Medicaid is extremely complex and can be difficult to navigate. Medicaid applicants must either have a disability, be caring for a disabled child, or have a monthly income under a limit set by the government each year. Medicaid applicants must also have less than $2,000 in certain assets, which can exclude primary residences, vehicles, and some personal property. The government will look at the most recent five years of financial statements to ensure an applicant’s eligibility, making it difficult for applicants to transfer assets in anticipation of filing for Medicaid benefits if they wait until the last minute.

Why Is it Essential to Plan Ahead for Texas Elder Care?

Published on: April 29, 2021 | By McCulloch & Miller, PLLC

Thinking about long-term care—especially as a person ages—can be an overwhelming and scary process. However, as time goes on, it can be more difficult for seniors to obtain proper long-term care. This is why planning ahead is essential. Elder law attorneys will discuss financing for long-term care, which includes often applying for Medicare and Texas Medicaid. Although these are difficult conversations to have, starting the process as soon as possible can ensure a smooth transition when the time does come for new housing or medical care.

Plan Now, Avoid Care Issues Later

The Massachusetts Attorney General recently announced a settlement with a nursing home to resolve allegations that they failed to meet the needs of their residents. The Attorney General’s investigation found that within the time span of a year, the nursing home admitted residents that they did not have trained staff members to properly care for them or the necessary equipment. This also included the staff failing to properly prevent the development of ulcers on residents. The case is an example of a nursing home failing to properly care for its residents.

Resource and Income Limits for Houston Medicaid Applicants

Published on: August 25, 2020 | By McCulloch & Miller, PLLC

As we have discussed in other posts, planning for the eventual need for long-term care is a crucial element of any Houston estate plan. With the costs of nursing home care rapidly increasing across the country, more families are taking a proactive approach when it comes to deciding how to pay for these future costs.

For families with significant assets, the concern is not necessarily whether they can pay for the necessary care, but how they can limit the amount their own assets will go towards paying for the care. Thus, Medicaid planning is focused on how to strategically structure familial assets in a way that will enable the family member in need of long-term care to quickly and easily qualify for Medicaid while preserving their assets.

Medicaid is a needs-based program, and applicants must meet strict asset and income limits to qualify for benefits. One of the most important elements of Houston Medicaid planning is understanding these asset and income limitations. Applicants with excess assets or income will be required to “spend down” the excess before they can qualify for benefits. Of course, this can leave a spouse who is not in need of care in a challenging spot, because the money they need to continue to live independently may be diverted to pay for long-term care.

What Does a Houston Medicaid Planning Attorney Do?

Published on: August 20, 2020 | By McCulloch & Miller, PLLC

While Medicaid planning is a term often tossed around, not many people know exactly what the process entails. In general, Medicaid planning is any assistance provided to an individual in advance of their Medicaid application. These tasks widely vary depending on the needs of the person, but may include anything from collecting documents to restructuring assets. Medicaid eligibility is complicated and even a simple mistake in the application may result in being denied benefits. Because of this, people will often consult a Houston Medicaid planning attorney to help them with the process and ensure their family’s assets are maintained while their loved one receives the long-term care they need.

Reviewing Medicaid Eligibility

It is important for an individual to determine their Medicaid eligibility in order to have a full grasp of the potential benefits that they could receive. The consequences of being denied Medicaid benefits can be detrimental not only for the individual, but also for their family. The American Council on Aging provides a free eligibility status checker to determine eligibility.

Creating a Houston Life Care Plan for Aging Loved Ones

Published on: August 3, 2020 | By McCulloch & Miller, PLLC

As people age, it becomes even more important to plan ahead for unexpected illnesses and disabilities. While creating an estate plan may seem like enough, a life care plan can help to ease the stress that comes with taking care of an elderly loved one. This is critical because it defines and organizes all aspects of a senior’s care. By establishing a Houston life care plan, a family can be prepared for any future care needs that may arise and feel confident in their decision.

What is a Life Care Plan?

A life care plan is a holistic look at your specific planning options, choices, and decisions. Besides including an estate plan, the life care plan will address the legal, financial, housing, and long-term care issues caused by the loved one’s chronic illness, disability, or even just their aging. Unlike traditional estate planning which focuses on preserving an elderly loved one’s hard-earned money for future generations, life care planning focuses on maximizing their quality of life and independence. Because there are a lot of unexpected situations that arise when a loved one continues to age, developing a life care plan allows families to be prepared for any situation that might arise. Overall, the goal of life care planning is to promote and maintain the health, safety, and well-being of the elder and their family.

These Texas Estate Planning Strategies Will No Longer Help Avoid Medicaid Penalties

Published on: July 22, 2020 | By McCulloch & Miller, PLLC

When putting together a thorough Houston estate plan, one important consideration is how care expenses will be paid later in life. This includes long-term care planning, which can be one of the most significant expenses for older Americans. For those with limited assets, Medicaid will typically pay for nursing home expenses.

Many people anticipating the need for long-term care have used several methods for gifting assets to others in order to qualify for this benefit. The goal of Medicaid planning is to qualify for Medicaid benefits that cover long-term care, while minimizing the penalty that would result from the transfer. Recent changes to Medicaid laws have rendered several of these methods that were formerly used to achieve these objectives obsolete. Below are a couple of strategies that will no longer be effective, moving forward.

The “Half a Loaf” Strategy

Planning for Medical Expenses During Retirement

Published on: November 18, 2019 | By McCulloch & Miller, PLLC

The unknown about spending in retirement is not just whether it will be higher or lower, but when during the course of retirement, you’ll be spending more or less. If you downsize, housing costs will decrease, but if you travel more, recreational spending will rise.

According to a recent article from Investopedia, “How to Plan for Medical Expenses in Retirement,” healthcare is likely to be the biggest expense in retirement. A survey from Fidelity Investments found that a 65-year-old newly retired couple should budget about $285,000 for medical expenses in retirement. It is better to have the money set aside than to be surprised by the cost. That number also does not include long-term care. Depending on where you live, those costs can range from $18,720 for adult day care services to $100,375 for a private room in a nursing home.

Despite saving and preparing for retirement their entire lives, many retirees aren't mentally or financially prepared for these types of expenses. A survey by HSA Bank found that 67% of adults 65 and older thought that they’d need less than $100,000 for healthcare. However, Fidelity calculated that males 65 and older will need $133,000—and females, $147,000—to pay for healthcare in retirement.

How Does a Medicaid Annuity Work?

Published on: July 1, 2019 | By McCulloch & Miller, PLLC

When one spouse needs nursing home care and the other is healthy, there are several approaches that can be taken to securing Medicaid coverage. An elder law estate planning attorney should be contacted, since every situation is different. For some couples, a Medicaid-compliant annuity may be a solution.

What happens when one person needs long-term nursing home care, but does not have long-term care insurance and the family cannot afford to pay out of pocket? Applying for Medicaid is difficult if you have too much money to qualify, but not enough to allow the healthy spouse to afford to pay their bills.

Doing a “Medicaid spend down” requires the person to become broke, before they are eligible. What happens to the spouse’s lifestyle? One solution is a Medicaid Annuity, as described in U.S. News and World Report’s recent article, “What Is a Medicaid Annuity?”

How Trusts Work in Estate Planning for Regular People

Published on: March 18, 2019 | By McCulloch & Miller, PLLC

You’ve heard the expression “trust fund babies.” However, trusts are not just for the wealthy. They have a number of uses in estate planning and can be helpful at any asset level.

The reality of our own mortality keeps some of us up at night. For others, it’s a disturbing thought that is easily brushed aside. Whichever group you belong to, you need to have an estate plan in place. This is the only way that you can have any say in how your assets are distributed after you pass. Without an estate plan, your family will be subjected to much more stress and financial strain. One part of an estate plan is a trust.

Barron’s recent article, “Why a Trust Is a Great Estate-Planning Tool — Even if You’re Not Rich,” explains that there are many types of trusts, but the most frequently used for these purposes is a revocable living trust. This trust allows you—the grantor—to specify exactly how your estate will be distributed to your beneficiaries when you die, and at the same time avoiding probate and stress for your loved ones.

How Does Medicaid Treat College Savings Funds?

Published on: October 31, 2018 | By McCulloch & Miller, PLLC

Saving for college but needing to receive Medicaid is a complicated equation.

The answer “It depends” is not much of a comfort when considering how college savings accounts will be treated for Medicaid purposes. However, it is, unfortunately, the most accurate answer. There are several factors that must be considered:

What type of account you used to set aside the college money;