Houston, Texas – Houston Medicaid planning attorney Whitney L. Thompson of The Law Office of Whitney L. Thompson (https://www.wthompsonlaw.com/medicaid-penalty-period-avoidance/) shares practical guidance on Medicaid penalty period avoidance for families preparing for long-term care in the Greater Houston area. The firm serves Harris, Fort Bend, Brazoria, Montgomery, Matagorda, and Wharton counties and provides counsel on how the Medicaid look-back rules affect eligibility. The announcement outlines how transactions are reviewed, how penalties are calculated, and which planning steps can reduce risk before an application is filed with the Texas Health and Human Services Commission.

A Houston Medicaid planning attorney can evaluate transfers within the 60-month look-back and explain how Texas applies a statewide daily penalty divisor when calculating ineligibility periods for long-term care benefits. For case actions disposed on or after September 1, 2025, HHSC uses a $262.37 per-day divisor; for actions disposed September 1, 2023 through August 31, 2025, the divisor is $242.13 per day. The penalty period equals the total uncompensated transfer amount divided by the applicable daily divisor, rounded down to whole days. For example, a $73,339 transfer under the current divisor results in 279 days of ineligibility, during which Medicaid will not pay for nursing-home care. Local cost context also matters. Texas’ 2024 median monthly nursing-home rates are approximately $5,475 for semi-private rooms and $7,087 for private rooms, while many Houston facilities exceed those medians. Families in Bay City and surrounding Matagorda County may see lower averages, often around $4,000 to $5,500 per month.

The firm notes that a Houston Medicaid planning attorney can help families map compliant strategies that address both eligibility and care needs. Common approaches include written caregiver agreements that document services and compensation, Medicaid-compliant annuities that are irrevocable, non-assignable, actuarially sound, and payable in equal installments with the State of Texas named as remainder beneficiary, irrevocable funeral trusts within state limits, and recovery of transferred assets where feasible.

In limited situations, an undue hardship waiver may apply, but only after showing diligent efforts to recover assets and meet basic needs. Gifts within the federal tax exclusion do not create a Medicaid exemption, undocumented sales can be problematic, and irrevocable trusts created during the look-back may trigger penalties. Because HHSC applies a single statewide divisor, a Houston Medicaid planning attorney can interpret the rules against actual local pricing, which often diverges from statewide medians.

During any penalty period, families generally pay out of pocket until the calculated days expire and the applicant re-qualifies. Timing is critical because the penalty begins only after the applicant is otherwise eligible, including medical criteria and institutionalization or waiver services. The Law Office of Whitney L. Thompson supports households throughout Houston Methodist Hospital’s Texas Medical Center corridor, Memorial Park, NRG Park, The Heights, Sugar Land, Pearland, The Woodlands, and Bay City, and provides coordinated planning across Harris, Fort Bend, Brazoria, Montgomery, Matagorda, and Wharton counties.

About The Law Office of Whitney L. Thompson:

The Law Office of Whitney L. Thompson is a Texas law firm focused on elder law, Medicaid planning, estate planning, probate, and guardianship. The team assists clients with asset alignment, long-term care eligibility, and court proceedings from offices serving Houston and Bay City. Services extend across Harris, Fort Bend, Brazoria, Montgomery, Matagorda, and Wharton counties, with support tailored to local procedures and facility costs. For consultations or more information, call (281) 214-0173.

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Company Name: The Law Office of Whitney L. Thompson, PLLC
Contact Person: Whitney L. Thompson
Email: Send Email
Phone: (281) 214-0173
Address:4201 Farm to Market 1960 Rd W Suite 360, Box #116B
City: Houston
State: Texas 77068
Country: United States
Website: https://www.wthompsonlaw.com/