Unfortunately, many nursing home residents end up exhausting their assets on long-term care. But it doesn’t have to be that way. The best time to plan for the possibility of nursing home care is when you’re still healthy. By doing so, you may be able to pay for your long-term care and protect assets for your loved ones. How? Through Medicaid planning.You worked hard all of your life to pay off your mortgage and build a retirement fund. You expected to live off your savings in the comfort of your own home, and you planned to leave something to your kids at the appropriate time. Suddenly, the unthinkable happens–you suffer a stroke at age 70 and must spend the rest of your years in a nursing home. What will happen to your life savings?
Frequently Asked Questions
To be eligible for the Medicaid Institutional Care Program, an applicant needs to satisfy the following:
- U.S. Citizen (or Legal Permanent Resident, 5 years or more)
- Florida Resident
- Aged, Blind, or Disabled
- Placed in a Medicaid Approved Skilled Nursing Facility
- Receiving 24 hours a day/7 days a week Skilled Care (Intermediate I or II Skilled Care) and must be and an appropriate placement
- Must have applied for all benefits available (VA benefits, etc…)
For all practical purposes, in the United States the only “insurance” plan for long-term institutional care is Medicaid. Lacking access to alternatives such as paying privately or being covered by a long-term care insurance policy, most people pay out of their own pockets for long-term care until they become eligible for Medicaid. Although their names are confusingly alike, Medicaid and Medicare are quite different programs. For one thing, all retirees who receive Social Security benefits also receive Medicare as their health insurance. Medicare is an “entitlement” program. Medicaid, on the other hand, is a form of welfare — or at least that’s how it began. So to be eligible for Medicaid, you must become “impoverished” under the program’s guidelines.
Also, unlike Medicare, which is totally federal, Medicaid is a joint federal-state program. Each state operates its own Medicaid system, but this system must conform to federal guidelines in order for the state to receive federal money, which pays for about half the state’s Medicaid costs. (The state picks up the rest of the tab.)
This complicates matters, since the Medicaid eligibility rules are somewhat different from state to state, and they keep changing. (The states also sometimes have their own names for the program, such as “MediCal” in California and “MassHealth” in Massachusetts.) Both the federal government and most state governments seem to be continually tinkering with the eligibility requirements and restrictions. This has most recently occurred with the passage of the Deficit Reduction Act of 2005 (the DRA) which significantly changed rules governing the treatment of asset transfers and homes of nursing home residents. The implementation of these changes will proceed state-by-state over the next few years. The rules for gaining eligibility to the program are explained in detail in the Medicaid section of this site. But to be certain of your rights, consult an expert. He or she can guide you through the complicated rules of the different programs and help you plan ahead.
Those who are not in immediate need of long-term care may have the luxury of distributing or protecting their assets in advance. This way, when they do need long-term care, they will quickly qualify for Medicaid benefits. Giving general rules for so-called “Medicaid planning” is difficult because every client’s case is different. Some have more savings or income than others. Some are married, others are single. Some have family support, others do not. Some own their own homes, some rent. Still, a number of basic strategies and tools are typically used in Medicaid planning. These are described below.
No, you do not have to sell your home in order to qualify for Medicaid in Florida. Your home is considered your homestead in Florida if it is your primary residence. Also, the statement of ‘intent to return’ from the nursing home resident protects their home from attachment.
Medicaid has a formula to determine the amount needed to be diverted from the ‘nursing home spouse’s’ income to the ‘community spouse’ in order to allow the community spouse to continue living in their own home. This is the Minimum Monthly Maintenance Income Allowance, which provides the community spouse an income of at least $1650 per month, including receiving money from the nursing home spouse’s income, if needed. Excess diversion funding is available up to $2,548 monthly, if housing costs exceed $498 per month.
After you complete your application, the Department of Children and Families must decide within 45 days if you are eligible to receive Medicaid. If you are disabled, the limit for eligibility determination is 90 days. If you disagree with the decision, you may ask for a hearing.
No. Any major transfer of assets out of a joint account, no matter who does it, still is considered in the Medicaid eligibility process.
Yes, it is. The best thing to do is to discuss the options with an Elder Law Attorney. One option may be to look into having a Qualified Income Trust (aka Miller Trust) created for such a purpose. Be aware that even if such a trust is created, the state is still likely to be the beneficiary of any funds remaining in such a Trust after the applicant is approved and passes away.
First, a person only needs to spend down or divest the assets of the person applying for Medicaid, not necessarily that of the well-spouse. Spending down the assets is one way to go, but it would be more useful to talk to an Elder Law attorney to investigate whether there are alternative methods that would both help your spouse and yourself.
To be clear, a military retirement, disability or otherwise, may need further review by a local Veteran’s specialist to determine the type of pension a person is receiving. As elder law attorneys, we often help people who are seeking to receive the Aid & Attendance (A&A) benefit from the VA. This benefit is actually broken up into two sections, a base pension which in 2016 is based on the applicant’s category, but usually either $643 or $842, as determined by the MAPR. In addition to the base pension, the A&A benefit is calculated based on a veteran’s specific circumstances. While an applicant can still receive Medicaid while on A&A, the base pension is calculated as income while the additional funds are not counted.
Yes, Florida Medicaid for senior care comes in two flavors. One is specifically in place to allow seniors to age in place without requiring a loved one to go to a Skilled Nursing Facility (SNF). The drawback for this Medicaid Diversion program, also affectionately known as the Statewide Medicaid Managed Care Long-term Care Program (SMMC LTC), has a lengthy waiting list. This program pays approximately $1,000 per month to a contracted agency to have home care part of the week. This program will, however, transition with a loved one to institutionalized care, if necessary. Two applications would be necessary, one for each applicant, once each person is cleared from the waiting list.
This varies depending on the financial status of the individual. Technically, once the applicant files the application, the Department of Children and Families (DCF) must “process” the application within 30 days after the date of application, but has up to 90 days to determine eligibility. This may be extended for a variety of reasons, not the least of which being preparing an applicant to file the initial application to appealing an unreasonable denial by DCF. It is best to consult a knowledgeable Elder Law attorney to help effectively handle this matter.
Yes. The Medicaid applicant is required to have limited assets and income and show as such to the Department of Children and Families (DCF). Similarly, the Community Spouse (CS) is required to have limited assets, under most circumstances. While the CS’s income may be required to be provided to DCF, in Florida it has no bearing on the application, as it is unlimited.