§ 2.1 Medicaid & Elder Law

Medicaid and Elder Law in Texas

Long-term care is the largest uninsured financial risk most American families face, and the misunderstanding that causes the most damage is the belief that Medicare pays for it. With very limited exceptions, it does not.

Medicare covers medically necessary skilled care for a limited period after a qualifying hospital stay — days of full coverage followed by days requiring a substantial daily co-payment, and only while a patient continues to require and benefit from skilled care. It does not cover custodial care: help with bathing, dressing, eating, transferring and toileting, which is what most people in a nursing facility actually need and what a facility actually charges for. Households discover this in the third or fourth week, usually by letter.

What remains is private payment, long-term care insurance if it was bought while the buyer was insurable, veterans' benefits for those who qualify, and Medicaid. For most families it is Medicaid, and the arrival is unplanned.

The programmes

Texas long-term care assistance is not one programme but several, administered by Texas Health and Human Services.

• Institutional (nursing facility) Medicaid — pays for care in a licensed nursing facility for applicants meeting the medical, income and resource tests.
• STAR+PLUS and the associated home and community based services waiver — the managed care programme through which many Texans receive long-term services and supports at home or in an assisted living setting rather than in a facility. Waiver programmes commonly carry interest lists, and getting a name onto a list early costs nothing.
• Community Attendant Services and related programmes — non-waiver assistance with daily activities for people who meet functional criteria.
• Medicare Savings Programs — pay Medicare premiums, and in some categories deductibles and co-insurance, for people with limited income and resources. These carry different and more generous limits than long-term care Medicaid, and eligible households frequently do not claim them.

Texas Health and Human Services publishes programme descriptions and the current figures on its long-term care pages; the federal framework sits at Medicaid.gov.

Three tests, all of which must be met

Eligibility for long-term care Medicaid turns on three separate determinations, and an applicant must satisfy all three.

The medical necessity test asks whether the applicant genuinely requires the level of care sought, assessed through a functional evaluation. The income test is unusual in Texas, which is an income-cap state: an applicant whose gross monthly income exceeds a specified figure is ineligible outright, no matter how high their care costs — a cliff, not a slope, and the reason qualified income trusts exist. The resource test limits countable assets, with a substantially different and more generous calculation for a married couple where one spouse remains in the community. All three are set out on the eligibility page.

What "elder law" actually covers

Benefits eligibility is the largest piece but not the whole of it. The field also takes in incapacity planning — the durable and medical powers of attorney described on the core documents page, without which a family's only route is guardianship; guardianship itself, and the less restrictive alternatives Texas requires a court to consider first; nursing facility residents' rights, including the transfer and discharge protections in federal law and the state ombudsman programme that enforces them; elder financial exploitation, which Texas requires be reported to Adult Protective Services; and the Medicaid estate recovery claim that arrives after death, covered on the estate recovery page.

Why timing dominates the outcome

Almost every good option in this field requires lead time. The five-year look-back means that protective transfers must be made long before need. Long-term care insurance requires health the applicant may not have next year. Waiver interest lists take time to move. Powers of attorney require capacity to sign — and once capacity is gone, the only remaining route is a guardianship proceeding.

The families who fare best are the ones who did unglamorous things early: signed the documents, checked the beneficiary designations, put a name on the waiver list, and had one honest conversation about what should happen. The families who fare worst are usually not the ones who planned badly but the ones who did not plan at all, and then had to decide everything in a week.

That said, "too late" is rarely the whole truth. Even after an admission, meaningful options remain — spending down on genuinely exempt items, protecting the community spouse's share, correcting a transfer that created a penalty. Those are covered on the crisis planning page, and the errors that most often make things worse are on the common mistakes page.