*Note the information below is given to provide general information only. Do not rely on this information as legal advice in making an application for Medicaid. Medicaid laws are constantly changing, every individual circumstance is different and the information below specifically concerns Florida Medicaid. Consult with a qualified elder law attorney.
Q. Will I be forced to sell my home to pay for my care or the care of a loved one and spend the proceeds of the sale, before long-term care Medicaid eligibility.
A. No. No one can force you to sell your home to pay for care. Your residence in Florida is protected by the Florida Homestead law so that certain creditors, including health care providers and the government, cannot make a claim against your residence. If your home is sold, however, then the proceeds become a countable asset in determining Medicaid eligibility. If you own a home out of state, then it may be considered a countable asset. The government will also count any equity over $543,000.00 as a Medicaid eligibility factor.
Q. Do I make too much money for Medicaid?
A. For long-term Medicaid that helps pay for assisted living facilities (“ALF”) and nursing home care, the monthly income cap in Florida is $2,163 for the year 2014. Even if your income is over this amount, qualification can remain by placing your income in a Qualified Income Trust or “Miller trust”.
Q. Do I place my other assets in this Miller trust in order to establish Medicaid eligibility?
A. No. A Miller trust is for income only.
Q. Does Medicare pay for long-term care?
A. Medicare pays for a limited amount (maximum 100 days if there is a Medicare supplemental policy) of rehabilitation or therapy if there was at least a three-day hospitalization. This usually leaves either paying privately, a long-term care insurance policy or Medicaid, for payment of long-term care costs.
Q. Do the accounts that I own jointly with someone else count toward my any Medicaid eligibility?
A. It is assumed that the account belongs to the applicant unless it can be proven otherwise.
Q. Can I transfer or give away my assets to obtain Medicaid?
A. A transfer of assets can result in a penalty causing ineligibility for long-term care Medicaid. (There are some exceptions to this rule, primarily transfers to disabled children.) As a result of the Deficit Reduction Act of 2005 (“DRA”), the rules regarding transfers for less than fair market value have changed for transfers that occur on or after February 8, 2006. (Florida enacted this rule November 1, 2007.) Under the pre-DRA rules (the rules prior to 11/1/09 in Florida) there is a three year look-back period on transfers for no value, such as gifts, and a five year look back period on transfers to most irrevocable or revocable trusts to someone other than the grantor.
Under the pre-DRA rules, the transfer penalty applied at the time the transfer was made. Currently in Florida, there is a one month period of Medicaid ineligibility for every $7,638 transferred for no value. For example, under the rules before the DRA, a gift of $7,638 made to a grandchild by a long-term care Medicaid applicant would create a one month period of ineligibility from the time of transfer. Thus gifts could be made for a calculated amount during the month that is was certain Medicaid was not necessary.
Presently, under the post-DRA rules, the penalty for ineligibility does not begin to run until after a Medicaid application is made.
In addition, the ‘look back’ period for transfers is now 5 years (60 months) under the DRA. (Although Florida is still behind in implementing this 5 year look back period through implementation of state rules, we must still keep in mind the five year period due to the federal rule. For determining any possible Medicaid eligibility penalty for a gift made in the past, it is best to consult with a qualified elder law attorney.) In other words, a $7,638 gift made after 11/1/09 may still affect eligibility for a long-term care Medicaid, even if a Medicaid application is not made for several years! Penalties are computed in multiples of $7,638, so that a $15,276 gift would create a two month period of ineligibility, a $22,914 gift would create a three year penalty and so on.
Under the DRA, the presumption is that any uncompensated transfer (even a gift to a charitable organization) within the 5 year look-back period was done for the purpose of obtaining Medicaid benefits. Notwithstanding the DRA, there are still planning strategies presently available for asset preservation.
Q. Can't I always transfer $10,000 to my children?
A. See above. The annual gift tax exclusion (which remains at $14,000 in 2014) is still subject to Medicaid rules. So the transfer could result in a transfer penalty, depending on when the uncompensated transfer was made and if there was an existing transfer penalty or if it met one of the exceptions to the rule. So, one can give away $14,000 annually and not report reported to the IRS for tax purposes, but that such a person would be subject to the Medicaid transfer penalty rules.
Q. My attorney prepared a living trust that I was told protected my assets from long-term care costs. Does a living trust protect assets against long-term care costs?
A. No, if you have a living or revocable trust in you or your family name, then you are considered a beneficiary of the trust and the trust is usually considered an available asset for Medicaid eligibility. If your Florida residence is in trust (and is your primary residence) then it is not considered an asset for Medicaid eligibility.
Q. Under the circumstances, I have no choice but to place my spouse in a nursing home (the “institutionalized spouse”). May I, as the spouse that lives at home (the “community spouse”), be allowed to keep several hundred thousand dollars and still get eligibility for my institutionalized spouse?
A. Depending upon the title of the assets and other factors, the answer is probably yes. Proper planning with a qualified elder law attorney can help you protect assets and establish Medicaid eligibility.
Q. My spouse/parent/loved one is already in a nursing home; can I still apply and qualify for Medicaid?
A. Yes. Medicaid is need-based. This means that you have to need the help in order to begin the process of qualifying for it. If you are privately paying for long-term care, you definitely need to speak with a qualified elder law attorney, before it is too late.
Q. I already have a long-term care policy, will I still need Medicaid?
A. Possibly. Everyone should purchase a long-term care policy by the time they reach age 55. Most people, however, either do not have a policy or can no longer qualify for it due to health concerns. Even if you can qualify for a policy, you may not be able to afford the premium because of age or health. Often, if you already have a policy, the premiums may no longer be affordable due to age and health. Due to this, you may have bought a “stripped-down” version. These limited plans may not pay for the majority of costs at a long-term care facility.
Q. My friends and family have told me that I have too much money for Medicaid. Can an elder law attorney truly help me?
A. That depends. This is a true “lawyer answer” because every person’s situation is unique. Remember that unless your family, friends, investment counselor and even your attorney work in the field of Medicaid qualifying on a daily basis, they probably are not good sources for “expert” advice. Non-attorneys are unable to give legal advice, as that would be the unauthorized practice of law, unless they are supervised by an attorney. Seek accurate information from a qualified elder law attorney.
Greenberg Elder Law Services, LLC
Benjamin H. Greenberg, Attorney at Law
601 North Congress Ave., Suite 431
Delray Beach, Florida 33445
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Benjamin H. Greenberg is a member of the Florida and Pennsylvania Bars, The National Academy of Elder Law Attorneys and the Elder Law Section of the Florida Bar.