You may have heard that transferring assets, or helping someone to transfer assets, to achieve Medicaid eligibility is a crime. Is this true? What are the Medicaid spend down rules in Texas? The short answer is that for a brief period it was, and it’s possible, although unlikely under current law, that it will be in the future.

As part of a 1996 health care bill, Congress made it a crime to transfer assets for purposes of achieving Medicaid eligibility. Congress repealed the law in 1997, but replaced it with a statute that made it a crime to advise or counsel someone for a fee regarding transferring assets for purposes of obtaining Medicaid. This meant that although transferring assets was again legal, explaining the law to clients could have been a criminal act.

In 1998, then-Attorney General Janet Reno determined that the law was unconstitutional because it violated the First Amendment protection of free speech, and she told Congress that the Justice Department would not enforce the law. Around the same time, a U.S. District Court judge in New York said that the law could not be enforced for the same reason. Accordingly, the law remains on the books, but it will not be enforced.

My firm has been helping Texas families for many years navigate the issues surrounding getting Medicaid benefits to pay for a family member’s nursing home care. We can help you learn the legal Medicaid spend down rules in Texas. We do not charge for the initial consultation so please contact me today if there are any questions you have about what needs to be done to get Medicaid benefits to help pay for nursing home care. The phone numbers to call are 1-866-KNOW.LAW (866-566-9529) (TOLL FREE) or 972-772-6100 or you can email me at

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