Florida has a reputation for being home to many Americans who are advanced in age. This is for several reasons: no state income tax, beautiful weather, beaches, and affordable cost of living. One reason that is very important, but often overlooked, is that our rules with respect to Medicaid are quite friendly.
The qualification standards for Medicaid varies greatly from state to state. Some assets that may count against you in one state, will be ignored in others. Florida allows for a great deal of flexibility in rearranging your current assets and income so that you can qualify for Medicaid benefits. At almost $10,000 per month, Medicaid is almost necessary to get the skilled nursing many aged people need.
When I mention Medicaid benefits throughout this post, I am speaking specifically about benefits that cover the cost of skilled nursing care at a facility, the Institutional Care Program (ICP). Sometimes we call these “skilled nursing facilities” or SNFs, sometimes we call them nursing homes. The benefits discussed in this post will be those that cover the cost of a person who needs around the clock care at a facility.
How do Medicaid benefits work?
Medicaid benefits for a skilled nursing facility will generally be only for the amount the applicant cannot afford to pay. The applicant will pay nearly all of their gross income to the nursing facility, and Florida will pay the remainder directly to the facility.
This is not how benefits for the community diversion program work, nor is it how benefits for those living in assisted living facilities benefits are paid. I will cover those in a later post.
Do I have too much income to qualify for Medicaid?
In Florida as of the date of this post (3/15/2021) the current income limit is $2,382. This number usually changes annually, so be sure you’ve checked the current limit. I usually look at the schedule published by the Department of Children and Families, they oversee the Medicaid application process.
Some states make this limit a hard cap. If you make more than the income limit- too bad, so sad. Some other states, including Florida, allow for a method to qualify even if your income is over the limit. The most common method is to use a specific type of trust, called a qualified income trust, that will receive a portion of the applicant’s income each month. That income is generally still paid to the nursing facility, but it will not disqualify them from receiving Medicaid benefits.
Income is often one of the least difficult criteria to meet for most people.
Do I have too many assets to qualify for Medicaid?
This is a farm more complex issue. The short answer is: if you have more than $2000 you probably don’t qualify for Medicaid in Florida. Some people see this hard limit and begin trying to divest themselves of their assets. Making gifts, buying things for people, prepaying for goods and services. This is a very bad idea unless you hire an attorney to explain what transfers will not disqualify you
Some assets you think might count against you but don’t include primary residence (up to $603,000), one vehicle of any age or value, Individual Retirement Account making regular systematic required minimum distributions, rental property, property that is offered for sale, irrevocable funeral contract. Most of these have some qualifications that must be met to be excluded. In most cases though, these are pretty easy to satisfy. An experienced attorney can help you make sure you check all the right boxes.
Can I give my assets away to qualify for Medicaid?
Not generally. Sometimes this can work with spouses, but it ultimately depends on the value of all assets owned by the community spouse, and the timing of a refusal of spousal support and assignment of rights to spousal support to the state of Florida.
What can I do with my assets and still qualify for Medicaid?
Instead of giving things away- which 99% of the time will result in a penalty period where the Medicaid applicant will have to pay for skilled nursing out of pocket- you can exchange countable assets for non-countable assets or sell property or services to the applicant for fair market value.
It is usually allowable to spend the Applicant’s funds on obligations incurred prior to their application- pay off the credit card, mortgage, or car note. The drawback to doing this is that these funds will not be available to assist the applicant where Medicaid may not cover something.
A short (non-exhaustive) list of methods we often use to prepare a client to make an application for Medicaid are the following:
- Personal Services Contract.
- Purchase a vehicle or part thereof.
- Purchase a partial interest in real estate and place it up for sale.
- Purchase a rental property.
- Purchase an irrevocable funeral contract.
- Designate account to burial.
Do not try using these methods on your own.
There are a few other methods, but we use them infrequently because the drawbacks often outweigh the benefits. Regardless, if you aren’t sure if you can qualify for Medicaid, and you are planning on going into a skilled nursing facility, please call us or use the resources on this page to set up a free consultation. We can evaluate your assets and income, help you make any changes, and even prepare your application. Contact us today.