When you are going to qualify for Medicare as a senior, you may take some things for granted. Yes, there are out-of-pocket costs, but they are manageable for most people. The big-ticket items will definitely be covered, and this can provide a sense of security.
This makes sense on the surface, but there’s an element that is often overlooked: Does Medicare cover nursing home care? Let’s look at the answer to this very important question.
Long-Term Care for Seniors
According to the Social Security Administration, once you reach the age of 67, your life expectancy is into the mid-80s. As you get older, you may not be able to handle all of your day-to-day needs without assistance.
In fact, a government study has found that 70 percent of seniors will need help with their activities of daily living eventually. Just over half of them will incur long-term care expenses, and nursing homes and in-home caregivers are very expensive.
Custodial Care vs. Medical Care
Medicare covers medical care and convalescent care after an injury or illness when recovery is expected. Custodial care, which is help with your day-to-day needs like grooming, cooking, dressing, etc., is a different category.
The Medicaid program will not extend to long-term custodial care, so you are on your own if and when you need this type of assistance if you take no steps in advance.
Medicaid Coverage
Most people are aware of the fact that Medicaid is a jointly administered federal/state health insurance program for people with limited resources. In Texas and in most other states, the limit on countable assets is just $2,000.
That’s the bad news, but the good news is that Medicaid will pay for long-term custodial care if you can gain eligibility. This may seem impossible if you have diligently planned for retirement, but this is where an elder law attorney can enter the picture to provide a pathway.
Non-Countable Assets
The first thing to understand about Medicaid planning is the fact that some assets do not count. One vehicle is not counted, along with your household items and personal effects. Wedding rings, engagement rings, and heirloom jewelry are exempt from consideration.
You can retain up to $1,500 of whole life insurance and the same amount set aside for final expenses. Unlimited term life insurance is allowed because it has no cash value.
Home Ownership
A significant asset that is not counted is your home, with an equity limit of $752,000 in Texas in 2026. There is no equity limit at all if you are married and your spouse is going to continue to live in the home after you enter a long-term care facility.
Though you can qualify for Medicaid as a homeowner, you want to avoid this arrangement because of Medicaid estate recovery. To explain by way of an example, let’s say that you are single and you own a home that is in your name, and you qualify for Medicaid.
After your passing, the program would be required to seek reimbursement from your estate. The home would be part of your estate, so they could place a lien on the property in an effort to gain reimbursement for monies spent on your care.
Spousal Considerations
When a married person is applying for Medicaid to pay for long-term care, their spouse is entitled to a couple of allowances. One of them is called the Community Spouse Resource Allowance.
This equates to half of the couple’s countable assets, but there is a limit. It is adjusted annually to account for inflation, and for 2026, the limit has been set at $162,660. Last year, it was $157,920, so there has been a nice bump upward.
The institutionalized spouse’s income must be contributed toward the cost of the care that is being received. However, there is an exception to this rule if the healthy spouse needs the income to maintain a reasonable standard of living.
A community spouse who is still living independently can receive all or a portion of their spouse’s income via the Medicaid Monthly Maintenance Resource Allowance. There is a limit that stands at $4,066.50 per month in 2026.
Medicaid Trust
The widely embraced solution for long-term care planning is a Medicaid trust. If you convey assets into an irrevocable asset protection trust, they would no longer be your personal property. As a result, they would not be counted if you apply for Medicaid.
Assuming the trust is properly prepared, the assets that remain in the trust would be protected from Medicaid estate recovery after your death. This will include your home if you convey the property into the trust.
Timing is the key to the successful execution of this strategy. There is a five-year Medicaid look-back period. The administrators will look at your financial transactions going back five years, and there can be no transfers at less than fair market value during that interim.
To put this in plain English, you have to fund the trust at least five years before you apply for Medicaid to gain timely eligibility.
We Are Here to Help!
This is a lot to digest in a single reading, but here’s the key takeaway. If you take intelligent steps at least five years before you need long-term care, you can qualify for Medicaid if and when you need living assistance.
On the other hand, if you do nothing, you’re on the hook. According to Genworth Financial, the median annual charge for a private room in a Fort Worth area nursing home is over $90,000. A married couple could face two different sets of bills, so this is a very big deal.
We can help you position your assets wisely with future Medicaid eligibility in mind. Plus, your nursing home asset protection plan can be woven into your broader estate plan to provide total peace of mind.
You can set the wheels in motion right now by calling our Fort Worth, TX long-term care planning office at 817-899-3286. And if you would rather send us a message, fill out our contact form and we will get in touch with you promptly.
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