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.
In Texas, benefits received under Medicaid are also eligible to be recovered by the state after your passing. This means Texas has a right to ask for money from your estate after you die to compensate for services paid.
How Can an Estate Planning Law Firm Help?
Texas Medicaid is complex, but an experienced Medicaid crisis planning attorney can help you access the benefits while protecting your estate. There are strategies you can utilize years before a Medicaid application that allows you to decrease your countable assets in a legal, ethical way.
A Miller Trust, or Qualified Income Trust, can be used to exclude some income streams from your Medicaid application by transferring those streams to an irrevocable trust. An experienced estate planning attorney can make sure your trust qualifies as a Miller Trust for Medicaid planning purposes.
A Texas attorney can also help you execute a lady bird deed, which protects your home from Medicaid recovery from the state. A lady bird deed sets up a beneficiary that does not have control over the home until the death of the current owner, when the property will transfer to the beneficiary out of probate.
Call a Houston Estate Planning Attorney
For an experienced estate planning law firm with expertise in Texas Medicaid crisis planning, call McCulloch Miller, PLLC. The attorneys at McCulloch Miller, PLLC have decades of experience in helping clients and their families plan for retirement and beyond. Our team understands the importance of having a Medicaid crisis plan in place for you and your loved ones. Contact our office at 713-936-9073 to schedule a free initial consultation with an attorney on our team.