As a Medicaid attorney in Orlando, Florida, I have dealt with numerous clients who are frustrated by the complexity of Medicaid’s rules for long-term care benefits. Often, these people are surprised by the high cost of nursing home care, and they are looking for help from an elder law attorney to protect their asses. A Medicaid attorney can help people devise strategies to arrange their assets to qualify for potential future Medicaid need. Many clients need a Medicaid attorney to help deal with a last-minute planning when they find out that they, or their parent, needs immediate long-term care. Although each client’s situation is unique there are questions and issues that Medicaid attorneys in Central Florida, or in Florida in general, deal with repeatedly in most cases. Here are some frequently asked questions:
What is the difference between Medicare and Medicaid?
Medicare is health insurance for all U.S. citizens and other legal residents over age 65. Medicare is not need based, although there are premium surcharges for high-income individuals. Medicare provides some amount of long-term care. Medicaid is a need-based program to assist low-income and disabled people with the costs of both health care and nursing home care. Medicaid has income and asset tests.
If you already need Medicaid, but have too many assets, is it too late for any Medicaid planning?
It is never too late to protect assets and still qualify for a Medicaid program. While some Medicaid planning strategies may not be available if you already need Medicaid, there are still ways to protect most or all of your assets.
Is your home counted as an asset when determining if you qualify for Medicaid?
For most people, yes. The first $560,000 of a home is not counted, but you must have an intention to return to the home. After your death, the state of Florida will not take your home if the house qualifies as your homestead under Florida law.
Can Florida Medicaid get a lien on investment property ?
Income-producing real estate is exempt from Medicaid asset limits if the income is used for the applicant’s support. But the income it produces can be included in terms of Medicaid income limit eligibility.
Are adult children responsible for medical care of their parents?
Only the property and income of a Medicaid applicant’s spouse is used in determining an applicant’s Medicaid eligibility. Florida law does not allow the state to collect from non-spouses.
What will happen if you do have more than the Medicaid asset or income limits?
If you exceed the asset or income limits when you apply for Medicaid, then you won’t qualify and will have to pay your long-term care on your own. The resulting spending of assets and income might eventually qualify you for Medicaid, however. To avoid this situation, it’s important to incorporate Medicaid planning in your overall plan with your estate planning attorney.
What are the Medicaid asset limits?
A Medicaid applicant in Florida can’t own more than $2,000 in assets, not including exempt assets and not including assets not legally available to the applicant. In addition, the applicant’s spouse can keep up to $120,900 (2017 levels)—again, not including exempt and legally unavailable assets.
What assets are exempt in Medicaid eligibility calculations?
Florida Medicaid exempt assets include:
- Up to $560,000 in homestead equity
- A car
- Personal property (except for particularly valuable art or jewelry)
- Life insurance term policies owned by the applicant
- Irrevocable burial plans and burial savings up to $2,500
- Tax qualified retirement accounts
- Annuities that are distributing monthly income to applicant
- Income producing real estate (but the income might be included in an income test)
What does the look-back period mean?
The 5-year look-back period means that for the purposes of qualifying for medicaid in Florida, any transfers that the applicant made within the previous 5 years (whether to a trust or another individual) are included in the applicant’s total assets subject to Medicaid asset limits. The result will be a penalty reduction on available Medicaid assistance. If the transfer is compensated, then the penalty may not apply.
What documents do you need to apply for Medicaid?
In Florida, a Medicaid applicant needs the following documents:
- Proof of U.S. citizenship and Florida residency.
- Statements for checking and savings accounts, CDs, brokerage accounts, annuities, for the past 5 years.
- Full copies of any annuity contracts
- Any social security income verification letters.
- Verification of income from any other source.
- Insurance policies, cards, and declaration pages.
- Guardianship or power of attorney documents.
- Federal tax returns for the last 5 years.
- Deeds for any property owned, including your homestead property, plus tax bills.
- Copies of burial documents, including contracts.
What is a Medicaid trust or Miller trust?
A Medicaid trust is a legal tool to protect income in excess of Medicaid eligibility limits. A Medicaid trust enables a Medicaid applicant Medicaid to protect excess income and assets while receiving Medicaid benefits. A Medicaid trust or Miller trust is a complex contractual document and is often combined with other techniques as part of an overall Medicaid plan. Most trusts set up by other people such as parents or grandparents for the benefit of a Medicaid asset will be exempt from Medicaid if they include certain legal provisions and conditions.
Do you have to hire a local Medicaid lawyer?
No. While many of our clients are in Orlando, Medicaid planning depends on Florida state law and is not specific to any city. Therefore anyone in Florida can hire an Orlando Medicaid planning attorney and still receive the help they need.