Paying for a nursing home or assisted living in Florida is very expensive. The average cost without government benefits for a nursing home is between $5,000 and $10,000 per month. Then there’s the extra charges: transportation, incidentals, medications, and so on.
You may have heard of a government program called Florida Medicaid, which pays for a nursing home or assisted living. But you may not know how your family member can qualify for Florida Medicaid. Unfortunately, government help with paying for a nursing home in Florida through Medicaid comes with very strict requirements. First, the person has to be medically eligible. Also, the person needing assisted living has to have assets worth less than a certain amount. Finally, the person has to have income of less than a certain amount per month to qualify for Florida Medicaid. In sum, these tests refer to Florida Medicaid’s medical limits, asset limits, and income limits.
In Florida, Medicaid actually has three separate programs:
- The Institutional Care Program (nursing homes)
- The Medicaid Waiver
- Long Term Care Diversion Program (assisted living facility)
For elderly family members, the program you are interested in is typically the Institutional Care Program. This program is a common answer for how to pay for a nursing home in Florida. To qualify for this Florida Medicaid program, the applicant must meet the three tests and be medically eligible, under the asset limit, and under the income limit.
Medicaid planning in Florida is the set of techniques that lets one qualify for Medicaid to pay for nursing home in Florida without spending all of your assets and income on long-term care.
The first step in figuring out how to pay for a nursing home in Florida is to understand the Medicaid eligibility test. If someone can live independently at home, then they are not medically eligible. Florida Medicaid is only available for people that must be in a nursing home or assisted living facility. More specifically, this means the person needs help with basic daily activities such as bathing, eating, dressing and undressing, using the toiler, or getting into and out of bed.
Asset Limits for Florida Medicaid
Even if someone is medically eligible, they still have to meet the asset test to use Medicaid to pay for the assisted living. In short, the person must have no more than $2,000 in assets if they are unmarried. But there are many exceptions. To start, you need to divide all of the person’s assets into countable assets and non-countable assets. In other words, some assets aren’t tallied up when seeing if the person meets the asset limits for Florida Medicaid. In general, exempt assets for Florida Medicaid include:
- A primary home worth up to $525,000.
- One car (of any value)
- A burial plot
- Life insurance that doesn’t have a cash value
- A funeral service contract
- In some situations, income producing property (such as a rental home)—but keep in mind the rental income may go towards the income test.
If your family member has too many assets, then he or she may be able to use medicaid planning options to restructure these assets to still qualify for Medicaid without spending the assets on the cost of long term care.
Finally, the person entering the nursing home must meet the income test for Florida Medicaid. Almost anything is considered income, including social security, retirement funds, rental income, dividends, annuity payments, and so on.
In Florida, the income limit changes slightly every year, but it is typically around $2,100 per month.
Even if your family member’s income is over the limit, you may still be able to have him or her qualify for Medicaid to pay for the nursing home. Using a Qualified Income Trust (also called a Miller Trust) allows someone to qualify for Medicaid to pay for assisted living even though he or she earns more than the income cap.
What’s the catch?
In general the person’s excess income has to go to this Miller Trust, which must then go to the nursing home. So for the most part you aren’t preventing any of the income from going to the assisted living facility. But it does qualify them for Medicaid assistance to pay for the rest of the nursing home costs.
How to Pay for Nursing Home in Florida
The number one question people ask us is how they are supposed to pay for a nursing home for their family member in Florida without spending all of that person’s hard-earned life savings.
At first glance, you might think that if your family member has too many assets and too much income such that they can’t qualify for Medicaid, then they have to spend all of that money on the cost of the nursing home or assisted living facility. But that’s not the case.
You can use Medicaid planning to structure your assets and income in a way to still qualify for Medicaid to help pay for the cost of long term care. Getting qualified for Florida Medicaid in this way will allow your family member the care they need without having to spend all of their life-time earnings and assets they have saved.
Keep in mind this does not mean you are scamming the government or unfairly taking advantage of the system. Florida law itself allows you to take advantage of the long term care planning techniques to help you qualify for the government program. The problem is only that the techniques can be complicated and hard to understand.
If you’d like more information about how to play for long term care by using Medicaid, please give us a call–we’d be happy to help.