Florida Medicaid law covers qualification for Medicaid and the amount of Medicaid benefits that an applicant can receive in Florida for care in a nursing facility. Applicants work with an elder law attorney to best plan for Medicaid coverage and to become eligible for Medicaid.
What is Medicaid?
Medicaid is a social health care and nursing care program for individuals with limited resources. There are two aspects of Medicaid:
- Medicaid health coverage helps people without medical insurance.
- Medicaid nursing home coverage pays all of the nursing home costs for eligible applicants after the recipient contributes his income and assets to cost of care.
Medicaid Recipient Requirements
A Medicaid recipient must be:
- U.S. citizens or of U.S. legal resident.
- Maintain their primary residency in Florida.
- Require long term nursing medical care because of a medical or cognitive condition.
- Eligibility is conditioned upon applicant meeting income tests and asset limits.
Medicaid Income Eligibility
In Florida, Medicaid income eligibility includes the following requirements
- Medicaid applicant’s own monthly income cannot exceed $2,200 (2017) There is no limit on Medicaid applicant’s well spouse (“Community Spouse”).
- Married Medicaid applicant is allowed to credit some portion of monthly income above $2,200 the to support a well spouse if spouse’s monthly income is less than approximately $2,000.
- Any excess Applicant income after allowance for community spouse support must be paid to the assisted living facility or used to fund a Medicaid Trust established by the applicant. Trust income used to support Medicaid recipient during his lifetime.
Medicaid Asset Eligibility
Proper estate planning can reduce assets to more easily meet Medicaid asset limits. In Florida, Medicaid programs place limits on the assets that an applicant can have:
- Medicaid applicant cannot own more than $2,000 of assets in addition to any assets that are not counted because the law considers them either exempt or not available.
- A married Medicaid applicant’s Community Spouse may not retain more than approximately $121,000 of assets.
- Definition of “assets” includes all assets titled in applicant’s name or jointly with another person.
- Excess assets must be liquidated and the proceeds used to pay for long-term care.
Medicaid Exempt Assets
The following assets are exempt from the Medicaid program asset limits and do not need to be liquidated:
- Homestead: a Florida homestead is exempt up to $560,000 of equity. There is no equity ceiling if the home is occupied by the recipient’s spouse or a minor child.
- Motor vehicle: Medicaid exempts one vehicle regardless of age, type, or value. Medicaid exempts a second vehicle over 7 years old, except luxury or antique vehicles.
- Personal property: the recipient’s personal property is exempt except for particularly valuable items of jewelry, art, or collectibles.
- Burial plans: recipient may exempt irrevocable burial contract regardless of amount, and he may exempt an additional $2,500 held in reserve for funeral and burial expenses. Recipient may also exempt same amounts for burial plan and expense reserve for community spouse.
- Life insurance: cash value not to exceed $2,500 in life insurance policies owned by recipient and spouse are exempt from Medicaid.
- Retirement plans: IRAs, 401k plans and other tax-deferred retirement investment are considered exempt if the applicant is not taking withdrawals.
- Income producing investment assets: income producing real estate is exempt if it is generating net income and the income is being used to help support the Medicaid recipient. Income is counted in income eligibility test.
- Annuities: annuities are not exempt unless the applicant or community spouse is receiving monthly annuity withdrawals in an acutarially sound basis. The annuity contract also must meet Medicaid guidelines. If annuity is not being annuitized and generating income then it is not an exempt asset.
A Medicaid applicant may properly plan for Medicaid eligibility by transferring assets to family members or trusts. If, however, transfers were intended primarily to achieve Medicaid eligibility will be disallowed, and the transferred assets will affect Medicaid eligibility and benefits. Transfers of assets within five years of a Medicaid application (“look-back period”) will be presumed to have been intended primarily for achieve Medicaid eligibility. Transfers during the five-year look back period will result in reduced Medicaid benefits.