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Financial help for Texas Medicare enrollees

Texas residents can qualify for Medicaid nursing home services with home equity valued at up to $595,000, but estate recovery will likely apply

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As a Medicare beneficiary, where you live – meaning your state of residence – can have a significant impact on the care that you receive and how you pay for that care during your “golden years.” This page explains how Texas’s regulations and policies are likely to affect your bottom line.

Does Texas help with my Medicare premiums?

Many Medicare beneficiaries who struggle to afford the cost of Medicare coverage are eligible for help through a Medicare Savings Program (MSP). In Texas, these programs pay for Medicare Part B premiums, Medicare Part A and B cost-sharing, and – in some cases – Part A premiums.

MSP asset limits: The asset limits for QMB, SLMB and QI are $7,860 if single and $11,800 if married.

Who's eligible for Medicaid for the aged, blind and disabled in Texas?

Medicare covers a great number services – including hospitalization, physician services, and prescription drugs – but Original Medicare doesn’t cover important services like vision and dental benefits. Some beneficiaries – those whose incomes make them eligible for Medicaid – can receive coverage for those additional services if they’re enrolled in regular Medicaid for the aged, blind and disabled (ABD).

In Texas, Medicaid ABD is called Medicaid for the Elderly and People with Disabilities (MEPD).
Medicaid ABD benefits don’t ordinarily cover Long Term Services and Supports (LTSS). Applicants seeking those services have to apply for them separately, undergo an assessment, and meet different income and resource tests.

Income eligibility: The income limit is $783 a month if single and $1,175 a month if married.

This is less than the income limit for QMB – meaning that all Medicaid ABD enrollees in Texas are eligible for QMB benefits. Medicaid ABD enrollees can confirm with their Medicaid office that they’re also receiving QMB.

Asset limits: The asset limit is $2,000 if single and $3,000 if married.

Extra Help with prescription drug costs in Texas

Medicare beneficiaries who receive Medicaid, an MSP, or Supplemental Security Income (SSI) also receive Extra Help – a federal program that reduces their out-of-pocket prescription drug costs under Medicare Part D. Individuals can also apply for Extra Help through the Social Security Administration if they don’t receive it automatically.

The income limit for this program is $1,615 a month for singles and $2,175 a month for couples, and the asset limit is $14,610 for individuals and $29,160 for spouses.

How does Texas regulate long-term services and supports (LTSS)?

Medicare beneficiaries increasingly rely on long-term services and supports (LTSS) – or long-term care – which is mostly not covered by Medicare. In fact, 20 percent of Medicare beneficiaries who lived at home received some assistance with LTSS in 2015.

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Medicaid fills this gap in Medicare coverage for long-term care, but its complex eligibility rules can make qualifying for benefits difficult. What’s more – eligibility rules vary significantly from state to state.

Medicaid nursing home coverage

Income limits: The income limit is $2,349 a month if single and $4,698 a month if married (and both spouses are applying).

When only one spouse needs Medicaid, the income limit for single applicants is used – and only income from the applying spouse is counted.

However, nursing home enrollees are not allowed to keep all of their income up to this limit. Enrollees must pay nearly their entire income toward their care, other than a small personal needs allowance and money for health insurance premiums (such as Medicare Part B and Medigap).

Assets limits: The asset limit is $2,000 if single and $3,000 if married (and both spouses are applying). If only one spouse needs Medicaid, spousal impoverishment rules allow the other spouse to keep up to $128,600.

Certain assets are never counted, including many household effects, family heirlooms, certain prepaid burial arrangements, and one car. Enrollees can’t have more than $595,000 in home equity.

Home and Community Based Waiver (HCBS) services

Every state’s Medicaid program covers community-based long-term care services, which are provided at home, or in an adult day care center, assisted living facility, or other “community” setting. Programs that offer this type of care are called Home and Community Based Services (HCBS) waivers because recipients continue living in the community, rather than entering a nursing home. In Texas, HCBS enrollees must need a nursing home level of care.

Income limits: The income limit is $2,349 a month if single and $4,698 a month if married (and both spouses are applying).

When only one spouse needs Medicaid, the income limit for single applicants is used – and only income from the applying spouse is counted.

Some states require HCBS recipients to pay a portion of their income toward their care, but Texas allows these enrollees to keep all of their income up to the eligibility limit as a personal needs allowance.

Assets limits: The asset limit is $2,000 if single and $3,000 if married (and both spouses are applying). If only one spouse needs Medicaid, spousal impoverishment rules allow the other spouse to keep up to $128,600.

HCBS recipients can’t have more than $595,000 in home equity.

Qualifying for Medicaid LTSS with income above the eligibility limit in Texas

The income limit for Medicaid LTSS programs in Texas is $2,349 a month (for single applicants). Applicants with higher incomes can become eligible for nursing home or HCBS benefits by depositing income into a Qualified Income Trust, which is also called a “Miller Trust.”

After it is placed in the Miller Trust, almost all of this income must be paid toward an enrollee’s care if they are in a nursing home. However, Texas allows HCBS recipients to all their income up to the Medicaid eligibility limit as a personal needs allowance, which can be used for health and living expenses.

Spousal impoverishment protections in Texas

Eligibility rules for Medicaid LTSS programs differ from other Medicaid benefits when only one spouse is applying. When this occurs, only the applying spouse’s income is counted. With other Medicaid benefits, the income of both spouses is counted – regardless of who is applying.

Spousal impoverishment rules allow community spouses of Medicaid LTSS recipients to keep a Minimum Monthly Maintenance Needs Allowance (MMMNA) from their Medicaid spouse’s monthly income.
In Texas in 2020, these spousal impoverishment rules allow community spouses to keep:

  • An MMMNA that is between $2,155 and $3,216 per month.
  • A Community Spouse Resource Allowance (CSRA) of up to $128,640.
  • A monthly housing allowance of up to $646.50.

Medicaid home equity limit in Texas

Federal law requires states to limit eligibility for Medicaid nursing home and HCBS to applicants with a home equity interest below a specific dollar amount. In 2020, states set this home equity level based on a federal minimum of $595,000 and maximum of $893,000.

Texas uses the federal minimum home equity limit – meaning applicants with more than $595,000 in home equity are ineligible for LTSS programs.

Penalties for transferring assets in Texas

Because long-term care is expensive, individuals can have an incentive to give away or transfer assets to qualify for Medicaid LTSS. To curb these asset transfers, federal law requires states to institute a penalty period for Medicaid nursing home applicants who give away or transfer assets for less than their value. Most states also have a penalty period for community-based LTSS.

Texas has an asset transfer penalty for both nursing home care and HCBS. The state uses a 60-month lookback period to calculate this asset transfer penalty – and asset transfers or gifts made during this period may result in ineligibility. This penalty is calculated by dividing the value of asset transfers and gifts by the monthly cost of nursing home care (which is $6,478 in 2020).

Estate recovery in Texas

A state’s Medicaid agency is required to recover what it paid for LTSS and related medical costs while a enrollee was 55 or older. The law allows states to also pursue estate recovery against beneficiaries age 55+ who did not receive LTSS, and younger enrollees who were permanently institutionalized.

Texas has chosen to only recover from the estates of Medicaid enrollees who received LTSS benefits while 55 or older, and who applied for those services after March 1, 2005.

When a deceased enrollee’s Medicaid coverage was administered by a Medicaid managed care insurer (which is the case for most Medicaid enrollees in Texas), the state will attempt to recover what it paid the insurer. That means the estate recovery amount could be more (or less) than the actual cost of Medicaid services received.

Texas may grant an exemption to estate recovery in cases where recovering from an estate would cause undue hardship.

Congress exempted Medicare premiums and cost sharing from Medicaid estate recovery starting with benefits paid after December 31, 2009. Medicaid will not try to recover what it paid for MSP benefits after that date, but may try to recover benefits it paid beforehand.

Where can Medicare beneficiaries get help in Texas?

Texas Health Information, Counseling and Advocacy Program

Free volunteer Medicare counseling is available by contacting the Texas Health Information, Counseling and Advocacy Program at 800-252-9240.

The SHIP can help beneficiaries enroll in Medicare, compare and change Medicare Advantage and Part D plans, and answer questions about state Medigap protections. Counselors may also be able to provide referrals for home care agencies or long-term care services. Individuals can enter their zip code on this website to find a local office that offers Medicare counseling.

Elder law attorneys

Elder law attorneys can help individuals plan for Medicaid long-term care benefits. Visit the National Academy of Elder Law Attorneys (NAELA) website to find an elder attorney locally.

Where can I apply for Medicaid in Texas?

Texas’s Medicaid program is overseen Texas Health and Human Services Commission (HHSC). You can apply for Medicaid ABD benefits or an MSP using this website.

This page contains more information about applying for Medicaid.

You’ll have to be interviewed if you apply for long-term care benefits. Many states also require Medicaid ABD applicants to be interviewed. However, interviews are no longer required in any state for MSP benefits.

Josh Schultz has a strong background in Medicare and the Affordable Care Act. He coordinated a Medicare ombudsman contract at the Medicare Rights Center in New York City, and represented clients in extensive Medicare claims and appeals. In addition to advocacy work, Josh helped implement federal and state health insurance exchanges at the technology firm hCentive. He has also held consulting roles, including at Sachs Policy Group, where he worked on Medicare and Medicaid related client projects.

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