A barrier to nursing home (n.h.) medicaid or supplemental security income (SSI) in Texas is excess resources. The measurable value of a full portfolio is about $10,000. The following resources are statutorily exempt. 20 CFR 416.1205. TDHS, Medicaid Eligibility Handbook (MEH) 2340:
ITEMS ADDING UP TO ABOUT $8000
1. $2000 for an individual, $3000 for a couple.
2. Insurance with cash value less than $1,500. MEH 2342.3.
3. A burial fund, contract or insurance less than $1,500. Also the interest on this fund may accumulate without penalty. 20 CFR 416.1231. MEH 2342.5
4. The six smaller exempt resources of $500 each listed at the bottom. State welfare has to follow the SSI rules. 42 CFR 435.721. 42 U.S.C. sec. 1396a(a) (10) (C) (1) (III).
ITEMS OF ANY VALUE
5. A home of any value where a spouse lives or where the patient intends to return. POMS SI 01130.100 (Cdrom 8/95). It alone not be given away as exempt. Home includes all adjoining land.
6. A car of any value used for work, medical care, or modified for the handicapped. MEH 2347.1 (91-22)
7. A burial plot, casket and headstone for the patient and each member of the immediate family. Items of any value. TDHS, MEH 2341.5(4/90). Additional funeral expenses can be exempt if placed in an irrevocable arrangement or if owned by a third party. MEH 2342.5 (95-15) & 2313.44 (98-11). Funeral homes have these forms. Such expenses include open and closing the graves, flowers and transportation.
8. Term insurance of any value. MEH 2342.4.
9. Any property used in a trade or business without limitation in value. TDHS, Medicaid Elig.Hbk sec. 2343.11(93-5)
ITEMS OF LIMITED VALUE
10. Income producing property worth less than $6,000 and producing income at 6% per year. Query $6,000. Herron 576 F.Supp.218. MEH 2343.12 (97-23).
11. Items of unusual value each worth less than $500.
12. Cheaper exempt resources: Medical equipment. Rings from a wedding or engagement or other sentimental jewelry. Work tools and equipment including a second vehicle for an appropriate occupation. Durable household appliances worth less than $500. each: for example, a refrigerator, television or washing machine. POMS sec. SI 01130.515 (1/86) There is no legislation to support the $500 limit. These do not have to be in a patient’s room.
13. The rules are different for transfers tospouses, transfers to others and trusts.
HOMESTEAD — MEDICAID NURSING HOME ELIGIBILITY — OPTIONS ON DISPOSING OF HOMESTEAD REAL PROPERTY UNDER 2005
Frequently nursing home patients are reluctant to apply for medicaid because they do not want to lose their homestead. THHS denies medicaid for real and personal property worth more than $2000. THHS. Texas Health & Human Services Commission. Generally THHS did not require the sale of a homestead, but in H.B. 2292 the state legislature established homestead lien claim effective Mar. 1, 2005. Tex.Gov’t Code sec. 531.077. State welfare issued its regulations to implement that new state statute.
TDHS used to fight the U.S. Dept of Health & Human Services (HHS) and congress to avoid the lien. Most commentators advise patients to give their homes away after medicaid starts payment if the law allows it, but only 5% of patients have that option. These are some of the other options. The choice is very technical. The decision is expensive to implement and hard to reverse. Please consult with an attorney.
This has all been made more complicated by the Feb. 6, 2006, amendments to the federal medicaid statute that removed the option of giving about $3500 per month. Deficit Reduction Act of 2006.
WHEN YOU DIE, DOES STATE WELFARE TAKE AN INTEREST IN THE HOME?
The federal 1993 Omnibus Budget Reconciliation Act (OBRA), the appropriations bill, amended the nursing home medicaid program to provide a nationwide medicaid lien on homesteads. Pub.L.No. 103-66, 1993 USCCAN 378, 681, 1088, 1522. 42 U.S.C. sec. 1396p(a)(I)(B). It is uncertain whether this applies to unpenalized life estates and trusts.
CURRENT OPTIONS UNDER 40 TEXAS ADMIN. CODE SEC. 373.101
1. State welfare says there is not be a lien, but rather a claim that may not cloud title. It is unclear how workable this will be. But the caseworkers will probably not use the word lien, though the federal statute uses it.
2. State welfare will not assess a lien on homes and land worth a total less than $100,000, if the heirs can establish financial hardship.
3. State welfare also is firm that the lien will be limited to probate estates, not property that passes as a nonprobate asset like most insurance or life estates and lady bird deeds. This notion raises the possibility of penalized deeds and perhaps unpenalized trusts.
4. State welfare gives a grandparent exemptions for persons on medicaid prior to the new law, may be to persons in a nursing home prior to the new law and to persons who have not signed an application with notice of the lien. It is unclear that the lien would start only on signing the application and forward or prospectively.
5. Other exemptions from the lien are surviving spouses and disabled children who receive homes. There are other exemptions.
SOME POSSIBLE WORK AROUNDS: Would a trust be a penalized gift?
1. Put land in a life estate deed with joint right of survivorship and wait out the $3500 transfer penalty. This may work if the patient is currently on medicaid. We currently count about 15 to 19 options.
2. Beef up your power of attorney to allow an agent to write trusts, self deal, make medicaid gifts even to the agent, partition an estate and write marital property agreements. It has always been a good idea to periodically renew a power of attorney.
3. The Texas homestead constitutional provision may prohibit it. Texas Constitution, art. 16, sec. 50.
THE PRIOR EXEMPTIONS STILL APPLY
But only 5% of families can use those.
Citing: Abshire, Monty D, & Farrell, H. Clyde, Save my home (Houston: Trio press 2005). Farrell, H.C., Update on medicaid planning…DFRA (Oct. 14, 2006, Austin. Tx NAELA)
Assistant professor, Marshall School of Law Texas Southern University (1970 – 1972), Graduate School of Social Work, University of Houston (1974 – 1976), Disability clinic, South Texas College of Law (1990).
Welfare rights handbook (Houston Welfare Rights Organization from 1971). Public benefits training (Austin: Texas Legal Services Center From 1972 and Houston Bar & Lormand 2006). See current handbooks above.
“Planning for long term care,” (Houston CPA Foundation: 1999). National Business Institute 1995. “Medicaid basics in twenty pages,” Houston Bar Assn 2002 and Medical Educ. Systems 2001. Medicaid case update (STCL 2004).
“Vital considerations . . . elderly,” “Ethics for elder law,” Texas Elder Law (Eau Claire: NBI 1997 & 1999 & 2008 and Lormand 2005 for ethics).
“Trusts for Medicaid and SSI planning in Texas,” Women Attorneys in Tax and Probate (Sept. 1994), HBA Trusts & Probate Section and NBI in 1997. Texas Bankers Assn 2000. “New Medicaid case update,” Elder Law Institute (state Bar and south Texas College of law 2003). “Medicaid litigation, court appeals, finances and cuts” (Austin: Texas NAELA Feb. 2008). National Academy of Elder Law Attorneys.
HENSON, MARY, ET AL V. TEXAS HEALTH & HUMAN SERIVCES COM’N, NO.
Cases on Medicaid and Supplemental Security Income (SSI) Henson, Mary, et al v. Texas Health & Human Services Com’n, No.