Medicaid Planning / Asset Protection

Paying for Long-Term Care  

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. Not included is the up to 100 days available from Medicare for rehabilitative skilled care that may be provided in the same facility.

Cost and paying for long term care, are but one of the issues involved in the selection of a skilled nursing facility for your loved one.  If you would like a copy of our FREE Northeast Florida Nursing Home Guide, please complete your Request for Free Northeast Florida Nursing Home Guide.

Long term care is paid for in one or a combination of three ways:

• Long-term care insurance
• Private Funds
• Medicaid

If you have assets worth protecting, are young and healthy enough to qualify and can afford the premiums, long term care insurance may be your best option. If your long term care insurance policy qualifies for the Florida Long Term Care Partnership, then you have the legal right to protect from Medicaid spenddown assets with a total value equal to the long term care insurance benefits.  For instance, if your long term care policy qualifies for participation in the Florida Long Term Care Partnership and provides $100 per day for five years, you can set aside approximately $180,000 of assets for your family that you othewise would be required to spend on nursing home care.  The Florida Long Term Care Partnership is one of the most effective asset protection devices available to the person who can qualify for long term care insurance.

If you have no long term care insurance, you will be required to draw from your own resources or Medicaid for payment of services. A Florida Medicaid planning attorney can help you  develope a properly designed Medicaid spenddown plan that may allow you to preserve some assets for family members and still qualify for Medicaid benefits.

Medicaid is a federally funded health care program designed for the poor. One of the components of Medicaid benefits is the Institutional Care Program (ICP). There are other less well known programs but ICP is the one that pays for nursing home care for eligible persons. The Medicaid application process is administered through the Florida Department of Children & Families. Nursing home expenses currently are approximately $72,000 per year. The average stay for a nursing home resident is over two years (Alzheimer's and dementia are usually much longer).  After a nursing home resident has spent down his or her resources they may become eligible for Medicaid benefits.

Medicaid planning is the process through which the Florida elder law attorneys and Medicaid planning lawyers at the Coleman Law Firm assist our clients in preparing their financial affairs so that they legally qualify for Medicaid benefits, while preserving assets for enhancing the lives of the nursing home resident during the period of time they are in the nursing home, and preserving assets for family members and loved ones.

If you are a concerned relative, loved one, or friend of a person who is resident in a nursing home, and you want to legally protect some of that person's assets from nursing home costs, then you should contact the Jacksonville, Florida elder law attorneys and Medicaid planning lawyers with The Coleman Law Firm to explore how we can help you achieve that objective legally.

The information that follows will provide some information about the Medicaid planning process and the rules and regulations governing a nursing home resident's eligibility for Medicaid benefits.  For additional information about nursing homes in Florida, the Florida Agency for Healthcare Administration provides a nursing home guide that rates all of the nursing homes that operate in the state.

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THE BASICS

Many courts have commented that Federal Medicaid laws are the most complicated laws that have ever been put into effect by Congress with the exception of the Internal Revenue Code. In addition, Florida has many special laws, rules, regulations and interpretations that increase the confusion. Proper planning with a Florida elder law attorney is absolutely essential to obtain Medicaid benefits.

Achieving Medicaid eligibility can be an overwhelming challenge for anyone, even for Florida elder law attorneys and Medicaid planning lawyers who practice in this area every day! Yet, a knowledgeable Florida elder law attorney can provide proper guidance when navigating this area. With that help the benefits to be derived from Medicaid eligibility can be substantial.

In Florida there are a number of different Medicaid programs including a long-term care assistance program for the financially needy.  This program is called the "Institutional Care Program" and is referred to as the ICP Medicaid benefits program. If certain eligibility criteria are met, which may be achieved through proper Medicaid planning, Florida Medicaid virtually absorbs the entire cost of nursing home care that exceeds the resident's income. The income amount that must be paid to the facility depends upon the Florida resident's marital status and the spouse's needs.

PROTECT THE SPOUSE

In Medicaid terminology, when there is a married couple, the spouse in the nursing home is called the Institutionalized Spouse.   The spouse who continues to live in the homestead and is not in a nursing home is called the Community Spouse.

A married couple's assets are all considered separately. It does not matter if the assets are held jointly or separately in each spouse's name. Some assets can be specifically exempt for the Community Spouse, such as a home  and its contents, a vehicle, and prepaid funerals as long as they meet certain criteria.  Proper Medicaid planning may help an individual or a couple meet those criteria. and the spouse staying at home is called the community spouse.

When the Institutionalized Spouse goes into the nursing home, that person's countable assets must be less than $2,000, but the community spouse is entitled to keep much more. That amount changes each January and you should consult a knowledge Medicaid planning attorney or lawyer to confirm the amount of the community's spouse's allowable resources at any given time.

The Medicaid laws, regulations, interpretations and applications are  complicated. The typical person is unable to determine what should be done to ensure eligibility for benefits. Many people believe their only option is to spend their life savings before they will be eligible to obtain Medicaid benefits. But, if couples avail themselves of advice from Florida Medicaid planning attorneys who work in this area, they will find that it may be possible to preserve substantial resources.  Additionally, a Florida resident can qualify for Medicaid benefits even if their income is above the allowable income limits through the use of a qualified income trust.

Although the basic rules allow a Community Spouse to protect a certain amount of countable resources, this is, in many cases, a fraction of what could have been preserved for the Community Spouse or the family if proper Medicaid planning strategies were followed.

A knowledgeable Florida elder law attorney frequently can have the protected resource amount for the Community Spouse increased to a level that would be far above what the lay person would obtain, simply because the lay person does not have a working knowledge of the Florida Medicaid laws and how to protect his or her rights to avoid spousal impoverishment through proper Medicaid planning.

There are several money saving Medicaid planning strategies that may be considered. In order to develop a strategy a thorough review of the couple's circumstances must first be done.

For Florida Medicaid planning and advice to be appropriate the needed relevant facts about the couple include:

• Age, medical condition, mental condition, lifestyle, prognosis, and desires of each spouse
• All of the couple's assets, ownership of each asset, values and tax cost basis.
• All income sources, amounts and survivorship rights.
• Full understanding of each spouse's relatives.
• Potential for veteran's benefits, and much more.

The following Florida Medicaid planning questions and answers should provide some insight into how a Florida elder law attorney can assist you and your family with appropriate asset protection through effective Medicaid planning.

My children's names are on my checking and savings accounts and my CDs.  Does that make them exempt or partially exempt?

Generally, no. Those are your assets and countable even though the children have access to the money.

I put my assets in a Trust a few years ago. Does that protect the assets?

Most often not. If the Trust assets or income can be used for your benefit, then they are available to pay the nursing home or for your at home 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.

Why can't I just give it to my children and then apply? 

Federal and Florida Medicaid rules do not allow you to give away money within a certain time period called the lookback. If you give away money within that period you could make yourself ineligible for Medicaid for a long time.

Can I give away money without penalty?

Most often not. There is a type of gifting that applies to federal estate tax issues but not Florida Medicaid issues. There are a few specific times when one can gift money without penalty.

What about just putting the money into a Medicaid Annuity?

Additionally, 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, the use of annuities in Florida Medicaid planning is useful in only a very small percentage of cases where both spouses are still alive. Often, with the aid of a Florida elder law attorney or lawyer the case can be handled in other ways that are more advantageous to the Medicaid applicant and family.  

Federal and Florida Medicaid laws, rules and interpretations are constantly changing. Before you rely upon any Medicaid information or advice, you should make sure your Florida Elder Law and Medicaid planning attorney or lawyer knows all the facts of your particular situation and the most current Federal and Florida Medicaid laws, rules and interpretations.

You also should be aware that each state implements the Federal Medicaid program in slightly different ways, with different rules and eligibility requirements.  Florida Medicaid is different in several respects to other states.  For instance, in Florida, the home is considered an exempt asset.  As an exempt asset, it is not necessary for the Florida Medicaid benefits recipient to sell the home that is the primary personal residence as a prerequisite to qualifying for Medicaid benefits.  The homestead can be preserved in Florida, though there are various rules that do apply to how the home is used during periods of nursing home confinement.  In most other states, it is necessary to sell the homestead and spend down the proceeds from the sale.  The important point to remember is that information you may receive from friends or neighbors who have gone through the Medicaid qualifying process in another state may not be applicable in Florida.  That's one of the reasons why it is so important for you to consult with a Florida elder law attorney when contemplating alternatives for paying for long term care, and Medicaid planning in particular.

ELIGIBILITY

Basic and Medical Necessity

This includes criteria such as medical necessity, age, citizenship, and residency requirements. To obtain nursing home Medicaid benefits, a person must be at least 65 years of age, blind, or disabled, and have the medical necessity to be in a nursing home.

For someone medically qualified for nursing home care but who is still at home, Florida also has certain pilot programs such as the Diversion Program and the Alzheimer's Initiative, which provide certain specific services.  A qualified Florida elder law attorney can assist you in determining whether your family member might qualify for such benefits.

Income Test

Florida is an Income Cap state which means there is an income limit for Medicaid eligibility.  A person's income is the total they receive from Social Security, pensions, IRAs and all other forms of income. The income limit typically goes up by a few dollars each year. In many cases, one can use a particular trust called a "Qualified Income Trust" (also known as a "Miller Trust" or a "QIT")  to legally solve the problem of too much income. An experienced Florida elder law attorney can assist you in the preparation and proper implementation of a Qualified Income Trust.  Following the detailed requirements for a qualified income trust is important for maintaining Medicaid eligibility after it is first obtained.  Your Medicaid planning elder law attorney should provide you with detailed and specific direction for the proper administration of your qualified income trust.

Income for Medicaid eligibility purposes is gross income. This means that all deductions are added back into the income before one can determine the total amount, and is another example of why proper Medicaid planning is so important for each involved individual, and how a qualified income trust may be necessary. 

Asset Test

The Florida nursing home resident must have less than $2,000 of countable assets. Some assets are exempt. Exempt assets may include a home and its contents, a vehicle, prepaid funerals, and cemetery lots. However, it is important to evaluate each asset carefully before one can know if the asset is countable or exempt. Such determinations require the expertise that an experienced Florida elder law attorney can provide you, through proper Medicaid planning.

Examples of countable assets are cash in the bank, cash, stocks, annuities, bonds, land, minerals, non homestead property, notes receivable, boats, and certain extra vehicles. Countable assets must be less than $2,000.

Even if a Medicaid spenddown plan is part of the plan to obtain Medicaid benefits, a knowledgeable Florida elder law attorney who is experienced in Medicaid planning is able to counsel clients about options that may be financially advantageous to the Medicaid benefits applicant and to the other members of the family.

Can Medicaid take my assets after I die? 

The assets of a deceased person who has received Florida Medicaid benefits are at risk of being taken by the state to repay for Medicaid services provided through Medicaid recovery. Thorough consideration of Florida Medicaid estate recovery should be part of good Medicaid spenddown planning by a Florida elder law attorney.  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.

If you, or a loved one or family member, needs long term care, please contact the Jacksonville, Florida elder law attorneys and Medicaid planning lawyers at The Coleman Law Firm so that we can assist you in protecting your assets from an unnecessary spend down, and allow you to protect as many assets as legally possible through proper Medicaid planning.

The information contained above is general in nature and subject to change frequently with changes to Federal and Florida Medicaid law, court cases, fair hearings, and many other actions that may impact your particular circumstances.  You should consult an experienced Florida elder law attorney or Medicaid planning lawyer to assist you when seeking elgibility for Florida Medicaid benefits.  For additional information you may want to review our companion website www.thecolemanlawfirm.elderlawanswers.com.

The Jacksonville Florida elder law attorneys and Medicaid planning lawyers with the Coleman Law Firm offer their services as estate planning, probate, elder law, Medicaid planning, including Medicaid spenddown planning, asset protection and guardianship lawyers and attorneys primarily in Northeast Florida including the following counties, towns, and cities:  Duval County - Jacksonville, Jacksonville Beach, Atlantic Beach, Neptune Beach; St. Johns County - St. Augustine, Ponte Vedra Beach, Nocatee, St. Augustine Beach; Clay County - Orange Park, Middleburg, Green Cove Springs; Nassau County - Amelia Island, Fernandina Beach, Yulee, Callahan; Flagler County - Flagler Beach, Palm Coast, Bunnell; Baker County - Macclenney, Glen St. Mary; Putnam County - Palatka, Interlachen; Columbia County - Lake City, Fort White; and in other parts of Florida as requested or necessary.  We are a participating attorney in the AARP Legal Services Network by GE.