{"id":11184,"date":"2022-05-02T01:58:48","date_gmt":"2022-05-02T06:58:48","guid":{"rendered":"https:\/\/agrilife.org\/texasaglaw\/?p=11184"},"modified":"2026-04-17T15:14:41","modified_gmt":"2026-04-17T20:14:41","slug":"texas-court-considers-principal-place-of-residence-requirement-for-medicaid","status":"publish","type":"post","link":"https:\/\/agrilife.org\/texasaglaw\/2022\/05\/02\/texas-court-considers-principal-place-of-residence-requirement-for-medicaid\/","title":{"rendered":"Texas Court Considers Principal Place of Residence Requirement for Medicaid"},"content":{"rendered":"

A recent Austin Court of Appeals decision in\u00a0Texas Health and Human Services Commission v. Estate of Clyde L. Burt<\/em>, answers an important Medicaid qualification question.\u00a0 Is an applicant required to reside in a home prior to seeking nursing care in order for the home to be considered an excludable resource\u00a0 under the Medicaid rules? [Read opinion here<\/a>.]<\/p>\n

\"\"

Photo by Avi Werde<\/a> on Unsplash<\/a><\/em><\/p><\/div>\n

Background<\/strong><\/p>\n

Clyde and Dorothy Burt bought a home in 1974 and lived there until December 2010 at which time they sold the home to their daughter, Linda Wallace, and moved into a rental property that Linda owned.\u00a0 In August 2017, the Burts moved into a skilled-nursing facility.\u00a0 Shortly thereafter, they purchased half-interest in their original home from Linda “to secure home equity in a home that they could return to if one or both of them should be able to leave the nursing home.”\u00a0 The same day, they filled out a Texas Health and Human Services Commission (“Commission”) form designating that home as their principal place of residence with an intent to return.<\/p>\n

After that purchase, they had about $2,000 left in their bank accounts and applied for Medicaid benefits beginning the next month.\u00a0 Their application was denied after the Commission found their resources were in excess of program limits because the Commission deemed the home a countable resource.\u00a0 Clyde died in November 2017 and Dorothy died in January 2018.\u00a0 Neither left the nursing facility and a debt to the facility of $23,479.35 remained.<\/p>\n

Linda appealed the Commissions’ decision, which was upheld by a hearings officer and Commission Legal Services Attorney, finding that an applicant must establish prior occupancy of a principal place of residence in order to exclude the equity value of a home for Medicaid eligibility purposes.<\/p>\n

Applicable Law<\/strong><\/p>\n

In determining the resources of an individual applying for Medicaid services, the Commission excludes the applicant’s home.\u00a0 See<\/em> 42 U.S.C. 1382b(a)(1). \u00a0Federal law defines a “home” as “any property in which an individual (and spouse, if any) has an ownership interest and which serves as the individual’s principal place of residence.”\u00a0 This includes “the shelter in which an individual resides, the land on which the shelter is located and related outbuildings.”\u00a0 See<\/em> 20 C.F.R. 416.1212(a).\u00a0 Similarly, Texas law provides for the exclusion of a home, defined as a “structure in which a person lives” and “all adjacent land…in which the person has an ownership interest and that serves as his or her principal place of residence.”\u00a0 See<\/em> 1 Tex. Admin. Code 358.103(38), (69). Both federal and state law provides that a home is the principal\u00a0 place of residence of the applicant or applicant’s spouse if the applicant “occupies or intends to return to the home.”\u00a0\u00a0See<\/em> 20 C.F.R. 416.1212; 1 Tex. Admin. Code 358.348(a)(1).<\/p>\n

Lawsuit<\/strong><\/p>\n

Linda then filed this lawsuit arguing that the home should have been excluded from the Burts’ countable resources.<\/p>\n

The trial court agreed with Linda and reversed the Commission’s finding.\u00a0 Specifically, they found the Commission’s interpretation of the rule regarding principal place of residence unreasonable and their findings based on the unreasonable interpretation not supported by substantial evidence.\u00a0 Thus, the trial judge reversed the Commission’s decision and remanded the case for further proceedings.\u00a0 The Commission appealed the decision.<\/p>\n

Court of Appeals’ Decision<\/strong><\/p>\n

The Austin Court of Appeals affirmed.\u00a0 [Read full opinion here<\/a>.]<\/p>\n

Wallace argued that the home should be excluded from the Burts’ countable resources because they had an ownership interest in the home and considered it their principal place of residence. The Commission claimed that because the Burts purchased the half interest after they entered the nursing facility, they could not be viewed as “intending to return” there and, it could not be considered their “home.”<\/p>\n

The court said that it “cannot ignore that the ‘principal place of residence’ references rely on the applicant’s subjective intent.”\u00a0 The federal Program Operations Manual System (“POMS”) notes that it matters where a person “considers”<\/em> his or her principal home to be, and notes that an agency may not consider factors such as the applicant’s age, physical condition, or likelihood of their actual return home in determining principal place of residence.\u00a0 Courts in other states have previously held that the proper standard for this evaluation is a “subjective intent standard” rather than an “objective expectations standard.”<\/p>\n

There are no appellate decisions addressing this issue in Texas.\u00a0 In light of that, the court looked to a letter ruling from a Travis County trial judge in a prior case, Estate of Seffer v. Texas Health & Human Services Commission<\/em>, No. D-1-GN-08-000790, 419th District Court of Travis County, Texas (Dec. 16, 2008 letter ruling).\u00a0 There, an applicant lived in an apartment when he moved into a nursing home and had no “home” at that time as defined by Medicaid.\u00a0 The judge observed that the rules explain that a homeowner can sell his home and use the money to buy another home without losing the exclusion, but do not address the situation where an applicant who is renting or otherwise lacks an excludable “home” buys a home after entering a nursing facility.\u00a0 The judge reasoned that an individual who is renting prior to entering a nursing facility will be just as “needy” of a home to which to return upon discharge as someone who owned a home.\u00a0 He stated that, “if Congress had intended to require prior occupancy, it would have been simple to state it.”\u00a0 Congress did not do so, however, and he concluded that the purposes of Medicaid are better served by allowing an applicant to claim the home exemption for a home he buys or inherits while in a nursing facility, as long as he intends to move into that home at the time of discharge.<\/p>\n

The Austin Court of Appeals found this letter ruling persuasive, also noting that the Commission’s prior resident requirement\u00a0puts at risk even childhood homesteads that could be inherited by nursing home residents.<\/p>\n

The court did make note of an Arkansas case where the court reached the opposite conclusion, requiring prior residence in order to exclude a home from countable resources, but found that court’s reasoning unpersuasive.<\/p>\n

Thus, the court sided with Wallace.\u00a0 “Under the Commission’s argument, an applicant can exempt his home if he lives there for one day before entering a nursing facility, but an applicant living in an apartment and in the process of buying a home who, the day before closing, suffers a fall requiring nursing care cannot.\u00a0 Such a distinction is not supported by the language found in the various federal statutes and rules, makes no practical sense, and in no way advances the purposes behind the assistance programs in questions.”<\/p>\n

Because the Burts bought a half interest in Wallace’s home (a home\u00a0 in which they lived for decades prior to selling to Wallace) and informed the Commission they considered it their principal place of residence and had an intent to return if they were released from the nursing facility, it should have been excluded from their countable resources.\u00a0 “The Commission’s requirement that an applicant must establish ‘prior occupancy’ of a home is incorrect.”<\/p>\n

Thus, the trial court ruling was affirmed. The deadline to appeal has not\u00a0 yet passed, so it remains to be seen whether the Commission will seek review from the Texas Supreme Court.<\/p>\n

Key Takeaways<\/strong><\/p>\n

First and foremost, Medicaid rules are extremely complex.\u00a0 I highly recommend working with an attorney to determine the right steps to take in order to qualify for Medicaid.\u00a0 I have a great podcast episode with Kristen Porter<\/a> that might be a good place to get some general background.\u00a0 Additionally, there are certain rules and lookback periods that apply when a person seeks to qualify for Medicaid, so it is critical to plan ahead and not wait until a crisis occurs.<\/p>\n

Second, this case is important as it is the first Texas appellate decision to determine whether a prior occupancy requirement is properly considered when determining primary residence.\u00a0 This case will likely impact many Medicaid applications going forward.<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

A recent Austin Court of Appeals decision in\u00a0Texas Health and Human Services Commission v. Estate of Clyde L. Burt, answers an important Medicaid qualification question.\u00a0 Is an applicant required to reside in a home prior to seeking nursing care in order for the home to be considered an excludable resource\u00a0 under the Medicaid rules? [Read opinion here.] Background Clyde and Dorothy Burt bought a home in 1974 and lived there until December 2010 at which time they sold the home to their daughter, Linda Wallace, and moved into… Read More →<\/a><\/span><\/p>\n","protected":false},"author":2444,"featured_media":11186,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[17],"tags":[],"class_list":["post-11184","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-estate-planning"],"acf":[],"yoast_head":"\nTexas Court Considers Principal Place of Residence Requirement for Medicaid - Texas Agriculture Law<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/agrilife.org\/texasaglaw\/2022\/05\/02\/texas-court-considers-principal-place-of-residence-requirement-for-medicaid\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Texas Court Considers Principal Place of Residence Requirement for Medicaid - Texas Agriculture Law\" \/>\n<meta property=\"og:description\" content=\"A recent Austin Court of Appeals decision in\u00a0Texas Health and Human Services Commission v. 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Estate of Clyde L. Burt, answers an important Medicaid qualification question.\u00a0 Is an applicant required to reside in a home prior to seeking nursing care in order for the home to be considered an excludable resource\u00a0 under the Medicaid rules? [Read opinion here.] Background Clyde and Dorothy Burt bought a home in 1974 and lived there until December 2010 at which time they sold the home to their daughter, Linda Wallace, and moved into... 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