Paying for nursing home care is overwhelming. Making the wrong financial moves can cost you thousands. This article highlights common Medicaid mistakes, myths about asset protection, and financial traps to avoid. Discover how an elder law attorney can help you protect your savings and secure long-term care without unnecessary financial loss.
Maybe you’re the adult child of an ailing parent. Maybe you’re a spouse whose husband or wife needs long-term care. Whatever your situation, learning what you need to know about paying for nursing home care is a tough task. Some people take the time to study up and plan in advance of actual need. Most likely, you’re reading this now because you need to make some quick decisions about paying nursing home costs.
Beware of trying to make critical financial decisions too quickly. The combination of emotional and financial stress can bully you into a financial trap. And wrong decisions can cost you dearly. Texas nursing homes are expensive.
Mistakes can be devastating, costing tens of thousands or even hundreds of thousands of dollars. Below, I’ve listed some common pitfalls to help you avoid them. Other families had to learn these lessons the hard way, but you don’t have to.
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Now, let’s explore the top mistakes so you can avoid them.
Mistake #1: Relying on Medicare or health insurance to pay for long-term care.
Though Medicare may cover a portion of a stay in a nursing home, what they provide is limited to rehab – not long-term care. If your spouse or parent spends at least three days in the hospital for medically necessary care, Medicare may pay for certain types of rehabilitation in a Medicare-certified facility. Payments can last up to 100 days. The 100 days is not guaranteed. Continued coverage depends on the ability of your loved one to participate in and progress from the services.
Mistake #2: Expecting a will or living trust to protect your assets.
You’ve made a costly mistake if you have set up a revocable living trust to protect your assets from nursing homes. A will describes how assets will be distributed after death. While residing in a nursing home, you are still alive. The will is not yet effective. You see, a revocable trust is not so much an asset protection device as an asset management tool. The money in the trust can be used to pay nursing home expenses but will not help when you apply for government benefits to help pay the bills. To Medicaid, the trust is transparent, and all the assets are reachable to pay for nursing home care.
Mistake #3: Transferring your assets without solid advice
If you transfer your assets to others (or even into an irrevocable trust) within five years of needing nursing home care, you’ll be caught by the five-year “look back” rule. This rule puts a penalty on gifts or transfers of assets made within sixty months of the date you apply for Medicaid. The Medicaid agency determines the length of any delay based on the amounts transferred. The penalty could prevent ever getting help paying for care.
Mistake #4: Selling your home.
For most people, their home is their largest asset. There is also a common myth Medicaid expects you to sell the home to qualify for financial support. In Texas, you can keep your home. Selling the home is not necessary. In other words, selling your home can be an expensive mistake. You have additional options, including transferring the home to a spouse or creating a Lady Bird Deed (which works for both single and married applicants).
Mistake #5: Expecting others in your family to help pay nursing home bills.
Even if your relatives have deep pockets, the costs of nursing home care add up. Costs can balloon well beyond what anybody expects. The average daily rate for nursing home care in Texas keeps rising. Genworth, the giant insurance company, found that the 2023 average cost of a private room in Texas is $83,038 per year. The annual cost for semi-private rooms was $53,876. Rates in large cities like Dallas, Austin, and Houston are generally higher. Rural areas and smaller towns are less.
But make no bones about it: rates this high can bankrupt you.
Mistake #6: Going it alone
Medicaid rules are insanely complicated. Add to that complexity the limited training the state provides caseworkers, and you have a recipe for financial disaster. Even if you think your situation is “simple,” trying to figure out the best solutions yourself puts you at financial risk.
Mistake #7: Not Protecting the Healthy Spouse’s Finances
Don’t assume that if one spouse enters a nursing home, the other will have enough money to live on. Medicaid’s rules limit how much income and savings the healthy spouse (the “community spouse”) can keep. Without proper planning, the healthy spouse may struggle to afford everyday expenses. The good news is that Medicaid allows certain protections to help the healthy spouse keep more assets. Most people don’t know about them. Talking to an elder law attorney can help make sure both spouses are financially secure while still qualifying for Medicaid assistance.
Most elder law firms offer a free assessment of Medicaid eligibility. Some charge a modest fee for that meeting. Spending time with an experienced elder law attorney can save you hours of future heartache. If you have assets to protect, discover how to get care while protecting your assets.
Take Action Now – Protect Your Family’s Financial Future
Nursing home costs and Medicaid rules are complex, and making the wrong move could cost you thousands. Don’t risk your family’s financial security—get expert guidance today.
📞 Call now for a FREE strategy session: (713) 970-1300
Whether you’re planning ahead or facing urgent decisions, an experienced elder law attorney can help you protect assets, qualify for benefits, and avoid costly mistakes. Don’t wait—call today!
