Answering Your Medicaid Questions
Why should I apply for Medicaid coverage?
On July 23, 2014, the U.S. Government Accountability Office released its report to the public entitled: “Medicaid: Financial Characteristics of Approved Applications and Methods Used to Reduce Assets to Qualify for Nursing Home Coverage.” The report found that “Medicaid paid for nearly one-third of the nation’s $158 billion in nursing home expenditures in 2012. To be financially eligible for Medicaid, individuals cannot have assets above certain limits. -Not all assets are countable in determining Medicaid eligibility; federal law discourages individuals from reducing their countable assets, for example, by transferring them to family members, to qualify for Medicaid. Although Congress has acted multiple times to address financial eligibility requirements for Medicaid coverage of nursing home care, methods exist through which individuals, sometimes with the help of attorneys, can reduce their assets and qualify for Medicaid.”
Paying for long-term care in a skilled nursing home facility
Long-term care, also called custodial care, is the living arrangement that includes nursing home care, assisted living facility care, and some at-home care circumstances. Medicare does not pay for nursing home care except for up to 100 days that is available from Medicare for skilled rehabilitative care that may be provided in the same type of nursing home facility. In Florida, the cost of nursing home care typically is between $8,000 and $10,000 per month or more than $100,000 per year. (For detailed statistics on the cost of long-term care, see the 2018 MetLife Survey of Long Term Care Costs). The question many families with elderly members face is how to pay for nursing home costs when it is needed. Your Medicaid planning elder law attorney may include qualified income trusts (sometimes referred to as a Miller Trusts), Medicaid asset protection trusts, personal care contracts, and many other techniques designed to protect a family’s assets without impairing eligibility for Medicaid nursing home benefits.
Will Medicare pay for my nursing home care costs?
However, the cost of, and paying for long-term care are but one of the issues involved in the selection of a skilled nursing facility in Florida for your loved one. If you would like a copy of our Free Northeast Florida Nursing Home Guide, please complete a request for free Northeast Florida Nursing Home Guide. Long-term care in Florida nursing home is paid for in one, or a combination, of three ways:
- Long-term care insurance
- Private funds
- Medicaid – through the Florida Institutional Care Program (ICP) for nursing home care
How can I avoid being impoverished by the high cost of nursing home care?
Without long-term care insurance, it will be necessary for you to use your own resources to pay for nursing home costs or apply and qualify for Florida Medicaid benefits to pay for nursing home care. A Jacksonville, Florida, Medicaid planning elder law attorney can help you develop a properly designed Medicaid spend-down plan that may allow you to protect some of the elderly person’s assets for family members, and still allow the elderly person to qualify for Medicaid benefits to pay the costs of the nursing home. We can also assist you in filing the application for Medicaid benefits to pay for your nursing home costs in Florida.
My children’s names are on my checking, savings and CD accounts. Does that make them exempt from Medicaid eligibility purposes?
Generally, no. Those are your assets and countable for Medicaid eligibility purposes even though the children have access to the funds.
I put my assets in a revocable living trust a few years ago. Does that protect the assets from Medicaid spend down?
Most often, not. If the trust is a revocable trust, or if the assets can be used for your benefit, then the assets in the trust are available to pay the nursing home, or for your home care costs. However, if your trust is an irrevocable Medicaid qualifying income only trust, the assets owned by that trust may not be included in the countable assets that must be spent down before qualifying for Medicaid benefits to pay for nursing home costs.
Why can’t I just give my assets to my children and then apply for Medicaid benefits to pay for my nursing home costs?
Federal and Florida Medicaid rules do not allow you to give away money within a certain time period called the lookback period. If you give away money within that period, you could make yourself ineligible for Medicaid for an extended period of time. Starting from 2011, that lookback period is five years for all transfers that are made by the person applying for Medicaid benefits where there is no fair value consideration provided for the transfer.
Can I give away my assets or my money without penalty? I heard I can give away $10,000 and not have any problems? Is that true?
No. Gifting for Medicaid purposes should not be confused with gifting for federal gift and estate tax purposes. A gift, or any other transfer without receiving fair consideration in return, is presumed to be for the purpose of qualifying for Medicaid benefits. While you may rebut that presumption, it is difficult, and the burden is on you to establish that the purpose of the transfer was not to qualify for Medicaid benefits.
What about just putting the money into a Medicaid qualified annuity?
People finding themselves in a situation where a family member is going into the nursing home, are sometimes led to believe that the purchase of an annuity is the best or even the only way out. This is rarely the case. In fact, annuities in Florida Medicaid planning are useful in only a small percentage of cases where both spouses are still alive, and the annuity is structured to provide income for the community spouse. Often, with the aid of a Florida elder law attorney or lawyer. There are other legal alternatives that are more advantageous to the applicant for Medicaid benefits for nursing home care in Florida or the other family members.
A Medicaid compliant annuity usually is a low-yielding investment, and under the Medicaid law, the remainder interest in the annuity must be paid to the State of Florida Medicaid recovery. There are some instances where the use of a Medicaid compliant annuity may be appropriate. A review of the applicable facts and proper Medicaid planning will help determine whether such an annuity is advantageous in a given person’s situation.
Can Medicaid take my assets after I die?
The probate assets of a deceased person who received Florida Medicaid benefits to pay for nursing home costs are at risk of being taken by the state of Florida to repay for Medicaid benefits provided through a process called Medicaid recovery. Thorough consideration of Florida Medicaid estate recovery should be part of good Medicaid spend down planning by a Florida elder law attorney. A careful review of beneficiary designations for life insurance policies, retirement plans and the titling of real property is necessary to avoid any assets going through probate. If the assets are transferred at death without probate, then those assets will likely not be subjected to Medicaid recovery by the state of Florida. Any funds remaining in a qualified income trust at the death of the person receiving Medicaid benefits are subject to Medicaid recovery by the state of Florida.
What are some of the tools and techniques of Medicaid spend down planning that are used to legally preserve and protect assets from nursing home costs?
There are a number of tools and techniques that are legally allowable to preserve and protect assets from nursing home costs through a properly designed Medicaid spend down plan, including:
- Personal care services contracts
- Special needs pooled trusts
- Medicaid qualifying annuities
- Purchasing income-reducing real property, homestead or other exempt assets
- Repayment of existing debt
- Spousal refusal or assignment of rights to support
Get Help From A Proven Florida Elder Law Attorney
An experienced attorney from The Coleman Law Firm, PLLC Attorneys and Counselors at Law, can answer your questions and create a strategy for protecting your estate, your assets and your future. Contact us today to schedule a consultation.