The Texas Senate has passed a bill (which has been sent to the Texas House) to facilitate the design and development of a Medicaid block grant waiver so that there would be a continuation of joint funding by the federal and state governments while allowing Texas to administer the program instead of the federal government.

As we know, the U.S. House of Representatives recently passed legislation for the reform or repeal the Affordable Care Act also known as Obamacare. Although it is likely that Medicaid coverage for nursing homes would be continued, substantial changes regarding the care, length of care and who would get the care could occur. Some of the potential changes are as follows:

  1. Liens on Homes. Under current laws, the state only has a Class 7 claim (similar to an unsecured debt on a credit card) against the home if it passes by intestacy or will of the deceased Medicaid recipient unless it falls within an exception. At the present time, exceptions to such a claim include a Ladybird (Enhanced Life Estate) Deeds, or the survival by the spouse, a dependent, disabled child of the Medicaid beneficiary or the survival of siblings or unmarried adult child (of any age) living in the home of the Medicaid beneficiary. It is possible that Texas could decide to foreclose on the home (if Texas authorizes liens) and these protections could be lost if Texas becomes a block grant state.
  2. Loss of Spousal Prevention from Impoverishment Laws. In 1987, Congress saw that spouses were getting divorced when there was an ill spouse applying for Medicaid to prevent potential impoverishment of the well spouse (also known as the community spouse). Presently in Texas, if the gross non-countable resource income (typically Social Security and pension income) of the married couple is less than $3,022.50 per month, then there is a formula to “expand” the protected resource amount to an amount far greater than the present $120,900 maximum resource limit. If this benefit to prevent spousal impoverishment is lost, it is likely that divorce rates will increase.
  3. Filial (Relative) Responsibility. The families of nursing home resident could be held personally liable for the care of a resident. Thus, a child may be forced to pay the nursing home of their parent (notwithstanding other obligations such as paying for their child’s college tuition, saving for retirement, their own health issues, etc.).
  4. Standard of Care. Patient’s rights such as privacy, loss of individual care plan, etc. could be lost if Texas chooses to do so.
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