Medicaid Assets and Debts

The HHSC reviews and examines every Medicaid applicant’s assets or resources to make sure they are within the current eligibility limits to qualify for Texas nursing home Medicaid. What do they do with debts?

There are two kinds of debts. The first is called a secured debt which is attached to a specific piece of property. Examples of common secured debts are loans to purchase a vehicle or home mortgage. The second type of debt is called an unsecured debt which is a debt that is not attached to any specific piece of property. Some examples of unsecured debts are credit cards debts and medical bills.

When it comes to totaling up a Medicaid applicant’s resources, each asset is evaluated separately. The balance of a secured debt is deducted from the fair market value of the asset it is attached to and the resulting equity is the value of the asset for the purpose of totaling a Medicaid applicant’s resources. For example, if you have a car worth $20,000 with a remaining loan of $12,000 the value of the car for Medicaid purposes is $8,000.

However, an asset cannot have a negative value which you might want to offset against other higher value assets. For example, if you have a car worth $20,000 with a remaining loan of $23,000 the value of the car for Medicaid purposes is $0. It is not negative $3,000 which would then let you keep $3,000 in another asset.

Unsecured debts are not available to offset the value of any assets when it comes to Medicaid eligibility limits. If an unmarried Medicaid applicant has $20,000 in assets and $30,000 in unsecured debts like credit card bills then for the purpose of determining Medicaid eligibility they have $20,000. The unsecured debts do not offset against the other assets.

This is just a small example of the multitude of laws, regulations, and methodologies that you need to understand in order to achieve nursing home Medicaid eligibility without making costly mistakes. If you do not know all of the laws and regulations that apply in your case then help is available from me at (832) 856-4526. I am an experienced Woodlands Medicaid attorney that is committed to protecting assets to the full extent of the law and creating Medicaid eligibility as soon as legally possible. Do not pay another nursing home bill that you may not have to.

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  1. I’m in a Texas nursing home on Medicaid so I only get to keep $60 a month. Is there a way to get a credit card so I could buy some small gifts and pay them out over time?

  2. As long as the gifts are small enough and infrequent enough to not be penalized by the HHSC during your next benefit review that is an option you can explore. The situation needs to be handled delicately to avoid adverse consequences however.

  3. The HHSC can look at credit card transactions if the Applicant has used their resources to make payments on a credit card.

    When it comes to eligibility, they do not use the credit card balance to reduce the Applicant’s asset total unless the Applicant actually pays off the balance.

  4. Hello. I don’t quite have all the information we usually need, but in general you will not create a nursing home Medicaid penalty situation by paying off a credit card. However, if your father is already on nursing home Medicaid or will be applying for it soon you can inform the credit card companies of his situation and there is a chance they may write off the debt.

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