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San Antonio Express-News, December 26, 1996

Medicaid Asset Protection


© 1989-2004, Paul Premack

Dear Mr. Premack: I found your article on the new Medicaid criminalization of gifts law to be very important. I have another question. What resources is a patient allowed to keep while still receiving Medicaid in the nursing home? Please do not use my name. – A.W.

Federal law imposes several qualifying standards when deciding who will qualify for nursing home assistance. First, the patient must be 65, or blind or disabled. Second, the patient’s doctor must certify that nursing home care is needed under the circumstances.

Third, the patient must have limited monthly income. In 1996, it was necessary that an individual have income not more than $1410 per month. As of January 1st the limit moves up to $1452 per month. A married couple who both live in a nursing home could not have more than $2,820 per month in 1996, or $2904 per month in 1997.

Forth, the patient must have countable assets that do not exceed $2,000 in value. Medicaid divides assets into two broad categories: "countable" and "non-countable". Some very significant and valuable items fall into the non-countable category:

1. An automobile, regardless of value, so long as one spouse needs it for transportation to work or to the doctor. If the car is for luxury transportation only, the value is limited to $4,500.

2. Household and personal items, like furniture, clothing and a television set.

3. A burial fund. This can be up to $1,500 in cash or $1,500 in life insurance. You can pre-purchase a burial plot and casket regardless of their value. In addition, you can have a prepaid funeral with no value limit if the plan is irrevocable.

4. The homestead. This is often the largest exemption, since it places the home and all land attached to the home in the non-countable category. To qualify, either a spouse must still live in the property or (if there is no spouse) the patient must have an intention of returning home. It does not matter that the patient may be too ill to actually return home. All Medicaid requires is a stated desire to return home.

5. When the patient is married, the spouse is also given a "spousal impoverishment" allowance. Medicaid totals the value of all countable resources and cuts them in half. If the resulting number is less than $15,804 (in 1997) then the spouse is allowed to retain countable assets of that value.

On the other hand, if the resulting number is more than $79,020 (in 1997) then the patient is credited with the excess. Only when the patient’s countable resources are brought down to $2,000 will the patient qualify for Medicaid assistance.

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Disclaimer: This column answers a specific legal question offered by an individual in the South Texas area. The answer may or may not match your individual situation. Be careful not to treat this column as specific legal advice that meets your individual needs. It may give you a solid basis for discussion with your own attorney. Also, please be aware that laws change. You should consult with your personal attorney before you take any action on this or any legal issue.


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