Elder and Disability Law Planning & Strategies

     Member-National Academy of Elder Law Attorneys, Inc.                                    www.texaselderlawattorney.com

Richard M. Barron Attorney at Law 209 E. Main St. Whitesboro, Tx. 76273 903-564-3663 or 940-612-3663 [email protected]

October, 2004

Does Every Married Couple Have To
Spend Their Assets to Qualify for Medicaid?

No. In fact, there are couples with more than $180,000 in assets (not including their home) who qualify for Medicaid without any spend down.

Medicaid law is complex and there is a great deal of confusion over the “division of assets” and the “ Medicaid spend-down.” Everyone’s situation is different and the following example is just one of the ways in which many of our clients are able to qualify their spouse for Medicaid without spending down a penny:

Sandy’s husband, John, entered a Texas nursing home in March of this year. At that time, their assets totaled approximately $180,000 (not including their home and one car, both of which are “exempt” for Medicaid purposes). Sandy went to see what benefits would be available to help her pay for her husband’s nursing home costs. The caseworker explained to Sandy that, upon application for Medicaid benefits, the state will total all of the assets she and John own on the day he entered the nursing home (the “snapshot date”). The state will then divide their assets in half (“division of assets”) and John will qualify for Medicaid once his one-half of the assets are spent down to $2,000.00. In other words, Sandy and John would need to spend their assets down to $94,760.00 before qualifying John for benefits. Sandy was colleting social security in the amount of $800 per month. She was distraught at the idea of having to spend her life savings......what about her own health care costs?

A social worker at John’s nursing home recommended Sandy contact an elder law attorney to see if there were ways she and John could preserve more than one-half of their assets. When we met with Sandy in May, we explained that she may be able to keep everything, but it would depend on the interest her assets were earning. Basically, every “community spouse” is entitled to a minimum monthly maintenance needs allowance of $1,515 per month. If Sandy’s income, including interest from her half of assets, is less than $1,515, Sandy can go to a fair hearing and request that she be able to keep more of her and John’s assets in order to earn additional income necessary to raise her income closer to $1,515.

Sandy has social security income of $800 per month. All of their assets are in CDs, money markets and bank accounts earning around 4%. We told Sandy that her one-half ($90,000 earning 4%) will be considered by the state as generating income of $300 per month, giving her a total income of $1,100 ($800+$300). Her income, because it is less than the minimum monthly maintenance needs allowance of $1,515, entitled Sandy to retain additional assets initially allocated to John. In this case, because John’s $90,000 is also earning 4% this would generate an additional income of $300 per month. Adding this to Sandy’s income of $1,100 would bring her income to $1,400 per month. Because this figure is still below the $1,515 to which she is entitled, Sandy would be entitled to keep ALL of the couple’s assets. In other words, we told Sandy she could keep the entire $180,000 belonging to her and her husband and still qualify John for Medicaid.

In addition, we told Sandy that the shortfall from the $1,515 could be made up from her husband’s income. So, in addition to keeping all of her own income and all of her and John assets, she would be entitled to an additional $115 of Johns income ($1,515-$1,400).

John has monthly social security and a pension totaling $1,600. Once qualified for Medicaid, John would be able to keep $30 each month as a “personal needs allowance,” Sandy would be allotted $115 of his income per month and the remainder would be his co-pay to the nursing home. So, instead of paying $4,500 per month to the nursing home, the couple’s co-pay would be only $1,455. And, we told Sandy we could request “prior quarter” and Medicaid would reimburse her for the past three months that she paid the nursing home in full! So, not only did we qualify John immediately for Medicaid, saving the couple from spending down to $94,760, but we also helped them recoup $9,135 in overpayments.

Again, this scenario is fact specific to Sandy and John. It cannot be accomplished at the case worker level as the state is not able to give legal advice on this type of appeal. The bottom line is that before you start spending down, you must seek advice from someone who knows Medicaid law.

Free In-Service Training Available:

The Law Firm offers free in-service training on topics related to:

  • Division of Assets

  • Medicaid Planning

  • Guardianship

  • Powers of Attorney

  • Other Elder Law Issues

  • This information is for general informational purposes only and does not constitute legal advice. For specific questions, you should consult a qualified attorney.

    Elder and Disability Law Planning & Strategies is made available and published as a service of Richard M. Barron, Attorney At Law, 209 East Main Street, Whitesboro, Texas 76273, 903-564-3663.

    Richard M. Barron, Attorney at Law encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Richard M. Barron. If you are interested in a free subscription to the Elder and Disability Law Planning & Strategies, then please e-mail us at [email protected]  or call us at 903-564-3663, or fax us at 903-564-5562.


    Elder Abuse Web Site
    Offers Resources and Contacts

    As our population ages, abuse of the elderly is becoming a growing problem. Elder abuse can take many forms: physical abuse, emotional abuse, sexual abuse, financial or material exploitation, abandonment, or neglect.

    If you suspect elder abuse, an outstanding resource for professionals and public alike is the National Center on Elder Abuse (NCEA) Web site. Among other things, the site offers a state-by-state listing of 24-hour toll-free numbers for reporting abuse, as well as information on elder abuse laws and an elder abuse listserv for professionals. The following is adapted from the NCEA site.

    More than two-thirds of elder abuse perpetrators are family members of the victims, typically serving in a caregiving role and typically adult children. Caring for frail older people is a very difficult and stressful task. This is particularly true when older people are mentally or physically impaired, when the caregiver is ill-prepared for the task, or when the needed resources are lacking. Under these circumstances, the increased stress and frustration of a caregiver may lead to abuse or willful neglect. Researchers have found that abuse tends to occur when the stress level of the caregiver is heightened as a result of a worsening of the elder's impairment.

    Adult children who abuse their parents frequently suffer from such problems as mental and emotional disorders, alcoholism, drug addiction, and financial difficulty. Because of these problems, these adult children are often dependent on the elders for their support. Abuse in these cases may be an inappropriate response by the children to the sense of their own inadequacies.

    Most physical, sexual, and financial/material abuses are considered crimes in all states. In addition, certain emotional abuse and neglect cases are subject to criminal prosecution. In many states, crimes against persons older than 65 are special crimes carrying enhanced penalties.

    When domestic elder abuse occurs, it can be addressed, provided it comes to the attention of authorities.

    In most jurisdictions, either Adult Protective Services (typically located within the human service agency), the Area Agency on Aging, or the county Department of Social Services is the agency that receives and investigate allegations of elder abuse and neglect. If the investigators find abuse or neglect, they make arrangements for services to help protect the victim.

    Visit the NCEA Web site at: http://www.elderabusecenter.org


    Legal Disclaimer

    This information has been provided for informational purposes only.  It does not constitute legal advice.  The receipt of this information does not establish an attorney-client privilege.  Proper legal advice can only be given upon consideration of all the relevant facts and the law.  Therefore, you should not act upon any information contained herein without seeking appropriate legal counsel.  


    Richard M. Barron

    Attorney at Law

    209 E. Main Street

    Whitesboro, Texas 76273

    903-564-3663, 940 612-3663, 800-939-9093

    Fax - 903-564-5562

    Email- [email protected]

    Not certified by the Texas Board of Legal Specialization

    Licensed to Practice Law by the Supreme Court of Texas