Medicaid Exempt Assets in Texas
Medicaid, which provides healthcare and nursing home services to low-income people in a federal and state partnership, limits the monetary value of resources and assets applicants may own to qualify. Under Texas Medicaid law, certain assets are exempt and not considered part of the applicable resources. Applicants for Medicaid must have their cases reviewed by a Medicaid eligibility specialist, who determines whether the individual or couple's resources count toward the limit for Medicaid qualification.
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Home Equity
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Under Texas Medicaid regulations, home equity of under $500,000 or transfer penalties applied to long-term nursing home care service does not restrict Medicaid payment for non-long-term care services, such as benefits for hospital or other healthcare services. Transfers refer to transferring the title of real estate to a relative within 36 months of applying for Medicaid benefits. Medicaid assumes that such transfers are usually done to avoid Medicaid pursuing the residence as part of estate recovery after the Medicaid recipient's death.
Nonexempt Assets
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At the time of publication, individual Medicaid recipients may have no more than $2,000 in nonexempt assets, such as a bank account, to qualify for long-term nursing home care. A married couple may have up to $3,000 in nonexempt assets.
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Exempt Assets
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Texas exempt assets for Medicaid purposes, at the time of publication, include the applicant's personal residence; one automobile; an irrevocable prepaid funeral contract for up to $2,000; life insurance worth up to $1,500; or a life insurance policy to pay for funeral expenses, and burial plots or spaces for the applicant, spouse or other immediate members of the family. If the applicant owns income-producing property, the value of the annual income if it yields a 6 percent return after expenses is exempt, as long as the income is used to pay nursing home costs. Also exempt are certain trust assets in which the applicant is named as a beneficiary, but Medicaid may require that the trust assets must be used to repay Medicaid from the beneficiary's estate after his death.
Legal Ways to Spend Down Assets
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Since the personal residence is exempt, people concerned about depending on long-term nursing home care from Medicaid may use other assets for home improvements before trying to qualify for Medicaid benefits. For example, potential Medicaid beneficiaries may spend down assets for needed home improvements, such as a new roof, plumbing, air conditioning system or similar infrastructure. While the individual or couple no longer have the monetary assets, the value of the residence is affected by the improvements.
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