It Counts: Individual Retirement Accounts

Retirement accounts can cause a lot of confusion when planning for Texas Medicaid eligibility. This is in large part due to the many different kinds of retirement accounts out there. Today we are going to look at one very common kind of retirement account, the individual retirement account, or IRA. This includes the traditional IRA and the Roth IRA. Many families saved funds in these accounts during their lifetime, but what happens to them when the owner of the account or their spouse needs Medicaid nursing home benefits?

§358.435(d) — The resource value of a time deposit is the net amount due after penalties are imposed for early withdrawal. If the funds cannot be withdrawn before maturity, the time deposit is not a resource until it matures. Time deposits include but are not limited to certificates of deposit, savings certificates, and individual retirement accounts (IRAs).

The Texas Health and Human Services Commission takes the approach that the availability of funds is the controlling factor in determining whether a time deposit such as an IRA is a resource. They examine the terms of the account to determine when the funds can be withdrawn and which penalties to impose. An early withdrawal penalty does not change the HHSC’s view that the account is still a counted resource. The penalties for withdrawal will be subtracted from the total value to determine its resource value.

Put simply, the balance of the retirement account counts as a resource for the purpose of determining eligibility. You may have to face penalties and other negative consequences, but the bottom line is if you can get the funds out of the account under any circumstances, then it counts.

Evidence Needed

If the Texas Medicaid applicant or their spouse own an individual retirement account the more information you can provide to your case worker the faster your case can be decided. Some of the documents you should begin gathering with your Houston Medicaid Attorney are account statements and letters from the financial institution establishing any early withdrawal penalties.

Protection May Be Possible

Although an IRA or other retirement account is not a protected asset on its own, in some cases I can provide you with an asset protection plan to protect the entire balance of the account or leverage the retirement funds to protect a portion of the account or other assets. If your parent or spouse in a nursing home wants to protect their retirement funds from nursing home bills, then contact me today to get started.

TexasTitle19.com is your connection to an experienced Houston Medicaid Attorney who can help you find the right nursing home, get the best care, and pay for it all without going broke. TexasTitle19.com is currently focused on Harris and Montgomery Counties, including the areas of Houston, Conroe, The Woodlands, Spring, Tomball, Humble, and Katy.