Public Benefits Planning

As we age, we begin to face challenging questions we may not have previously put much thought into. One of these issues is what our life will look like post-retirement. While most would prefer to remain in their home for as long as possible, the reality is that isn’t an option for everyone. And with the already high costs of long-term care increasing, it is important to consider public benefits planning. At the Houston estate planning law firm of McCulloch & Miller, PLLC, our attorneys command an impressive knowledge of Medicare, Medicaid, Veterans’ benefits, and the limitations of each. We work closely with our clients to develop sound long-term care plans well in advance of any need, providing valuable peace of mind and protecting their hard-earned assets.

The term public benefits planning refers to the comprehensive review of all available public benefits with an eye towards creating a long-term care plan the protects an individual’s assets while ensuring they receive the care they need, should the occasion arise. For most, Medicare and Medicaid are the two most commonly available benefits, as well as Veterans’ benefits, for those who qualify.

Long-term care options, such as nursing homes, assisted living facilities, and home healthcare aides, provide care to millions of older Americans. However, these options are all quite costly. For example, the average cost of a private room in a Houston, Texas nursing home can easily exceed $90,000 per year. Here’s a great resource for current costs of care and includes a projection for future costs.

Generally, most people are eligible for Medicare benefits at age 65. However, Medicare does not cover the cost of long-term care. Thus, this leaves most people with two options: pay out-of-pocket or apply for Medicaid, which provides long-term care coverage. The problem is, many people either have too many assets or make too much in passive income to qualify for Medicaid but don’t have sufficient assets to pay for long-term care. Even for those who have the ability to pay, spending a life savings on long-term care is not something most people envisioned.

This is where government benefits planning is useful. By creating a Medicaid plan in advance of the need for benefits, individuals can protect their assets while preserving benefit eligibility in the future.

One of the key considerations when pre-planning for Medicaid eligibility is the five-year lookback period. When someone applies for Medicaid, the Department of Health and Human Services will review an applicant’s financial statements for the preceding five-year period. If there are any transfers for which you did not receive something of equal value, you will be ineligible for Medicaid benefits. Thus, you cannot merely transfer money to a family member immediately before applying for Medicaid. Similarly, waiting to purchase long-term care insurance is similarly ineffective in that most will not qualify if the need for long-term care is quickly approaching.

However, by engaging in Medicaid planning well in advance of the need for long-term care, individuals can take steps to protect their assets while setting themselves up for future eligibility. Of course, planning options vary significantly and depend on your individual circumstances. To ensure that your Medicaid plan is sound, it is important to work with an experienced Houston estate planning attorney.

If you are approaching retirement and have not yet developed a long-term care plan for you and your spouse, it is important to do so sooner rather than later. At McCulloch & Miller, our dedicated Texas elder law and estate planning lawyers have an impressive knowledge of all available public benefit options and diligently create comprehensive long-term care plans our clients can rely on. To learn more about the services we provide and to schedule a consultation with a Houston public benefits planning lawyer, give us a call at (713) 333-8900. You can also reach us through our online contact form.

* Since these amounts (e.g., the "Average cost of Nursing Home," etc.) are adjusted annually, these numbers may vary slightly depending on when the most recent figures are released.