Avoid The Medicaid Spend Down in Texas: How Henry Protected $681K in Savings
Summary
Henry never imagined his life would be turned upside down when his wife suddenly needed long-term nursing home care—costing more than $7,000 each month. Like many families, he feared their was no way to avoid the Medicaid spend down at the last minute. They had $681,744.94 of their life savings now at risk to endless enormous care costs. Henry felt hopeless.
That hopeless feeling lingered until he discovered The Shea Law Firm.
This was the turning point.
Working with us, he learned about strategies like exempt retirement annuities, which allowed him to reduce his wife’s nursing home bill to $1,162 per month while protecting $681,744.94 of their hard-earned retirement savings. This case study explores how this life-changing discovery revealed a path to financial security for Henry while getting the care his wife needs – and how you can avoid the Medicaid spend down in Texas too.
Introduction
When a loved one enters a nursing home, families are often shocked at the sheer cost of care. For retirees like Henry, this unexpected expense can threaten a lifetime of savings. His wife needed the care, but at $7,000 per month, he feared their financial nest egg would quickly disappear before Medicaid would step in.
Henry’s situation highlights a common concern faced by families with loved ones heading to long-term care. Like many others, Henry wasn’t aware of his options and assumed financial ruin was unavoidable. But with expert Medicaid planning, Henry discovered a way to avoid the Medicaid spend down in Texas.
The Problem
The problem is simple. A nursing home bill of $7,000 every month.
It keeps coming.
It doesn’t stop until Henry got some help to pay the bill. Who would that be?
Does Medicare help with nursing home bills?
Medicare can help with some nursing home costs, but it doesn’t cover everything. It usually only pays for short stays in a nursing home, like after a hospital visit, and even then, it’s limited to at most 100 days. After that, you are left to figure out how to pay, which can lead to unexpected stress and financial difficulties. Henry’s wife had already used up her Medicare coverage so that was not an option.
Does Medicaid help with nursing home bills?
Medicaid can help pay for nursing home bills, but it’s not as simple as it sounds. Unlike Medicare, Medicaid doesn’t automatically cover nursing home costs. To qualify, you have to meet strict rules about your income and assets. That often means spending down savings first.
But here’s what many Texans don’t know: with the right guidance, you can avoid the Medicaid spend down and still qualify.
Where to begin?
Henry knew that Medicaid was the only way to get his wife the care she needed for a long time. But there was a big problem. Medicaid wouldn’t pay for her care until they had spent almost all of their savings. With a $7,000 monthly bill, their retirement and investment accounts, which added up to $681,000, could disappear very quickly.
Henry spoke to his social workers and case managers at the Paradigm at Brazos for advice. They told him he would need to spend down all but a small fraction of his assets for his wife to qualify for Medicaid. This left him feeling hopeless, believing his own financial security would be lost to meet his wife’s care needs and there was nothing he could do about it.
Families in this situation often feel trapped, unaware that there are solutions to help them avoid the Medicaid spend down — even if you need care right away. Henry, however, took the critical step of reaching out to an expert before it was too late.
Is It Possible to Avoid the Medicaid Spend Down in Texas During the Lookback Period?
Henry was in a tough spot. He wanted his wife to get help from Medicaid to pay for her nursing home, but they had too much money saved up. Medicaid has a rule that looks back five years to see if you gave away money or things to qualify. Henry didn’t have five years, he needed help now!
💡 But then, a lightbulb moment!
The five-year lookback rule doesn’t mean you can’t protect your things if you’re married. It just means you can’t give things away without a plan. The good news is Henry could keep his savings safe, even with the five-year rule, if he had the right plan.
Henry’s Plan to Avoid The Medicaid Spend Down in Texas
Henry knew he wanted to get his wife Medicaid and he did not want to lose his life savings. What he did not know was how to accomplish those two goals at the same time.
After days of searching and feeling overwhelmed by the complexity of Medicaid rules, Henry realized he needed the guidance of an experienced nursing home Medicaid attorney. He sought out someone who could not only explain the options available but also help him protect his hard-earned savings while ensuring his wife received the care she desperately needed from start to finish. That’s when he found us.
We reviewed his full situation and created a plan that let him avoid the Medicaid spend down and protect what he’d worked a lifetime to earn.
Here’s what we did:
- Repositioning Retirement Accounts: Henry’s non-exempt retirement accounts were converted into exempt retirement annuities. This step created the same outcome as spending them down, but he was able to completely avoid the Medicaid spend down. The retirement accounts are still owned by Henry and his wife, but for Medicaid eligibility their value is now $0 instead of $431,799.45.
- Creating a Medicaid-Compliant Annuity: We used Henry’s excess cash (from non-retirement investment accounts) to purchase a Medicaid-compliant annuity. This annuity converted the excess assets into a monthly income stream, ensuring Henry could still access this money over time without having to spend it down.
✅ These strategies allowed Henry to avoid the Medicaid spend down in Texas, get his wife the care she needed, and preserve his lifestyle and dignity.
With these two strategies, Henry avoided the need to spend down his $431,799.45 retirement savings and his additional investment funds. His wife’s care costs dropped significantly, and he preserved his financial stability.
With our expertise and personalized approach, we worked with Henry to develop a plan that addressed his concerns, safeguarded his financial security, and provided his wife access to the quality care she deserved. Medicaid eligibility doesn’t have to mean financial devastation. If you know how to avoid the Medicaid spend down in Texas, you can protect your home, retirement, and other assets.
The Result
Thanks to these proven Medicaid-planning strategies, Henry achieved remarkable outcomes:
- $431,799.45 Saved: Henry avoided the typical spend-down that would have drained his retirement accounts.
- $99,000 Non Retirement Savings: Henry receives the $99,000 in non-retirement savings in a monthly payment to him that avoid the Medicaid spend down does not have to be spent down.
- Lowered Monthly Costs: His wife’s nursing home costs were reduced from $7,000 per month to just $1,162 per month.
- Financial Security Preserved: Henry maintained his peace of mind, knowing his own financial future wouldn’t be jeopardized.
Conclusion
Henry’s story proves that with the right legal guidance, you can avoid the Medicaid spend down in Texas and protect the future you’ve worked hard to build. With the right expertise, families can protect their savings and still obtain quality care for a loved one.
💡 Don’t assume the spend down is your only option. There are legal ways to avoid the Medicaid spend down in Texas—especially if you act early.
If you’re facing nursing home costs for a loved one, don’t wait. The next nursing home bill is already on its way.
Learn the 4 steps to protecting your home and retirement.