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When it comes to understanding Medicaid, there are a lot of misconceptions and misunderstandings regarding how to qualify, what Medicaid can and can’t be used for, and even just exactly what Medicaid is. Below we explore and explain some common myths about Medicaid in Florida. For help addressing Medicaid issues in Florida now or in your future, contact the West Palm Beach Medicaid planning attorneys at Shalloway & Shalloway, P.A.
The Facts: Medicare is a federal health insurance program for people who are 65 or older, as well as certain younger people with disabilities or people with End-Stage Renal Disease. Medicare covers hospital stays, doctors’ visits and outpatient care, and prescription drug costs. Nursing home coverage is limited to skilled nursing care for recovery after a hospital stay of three days or more.
Medicaid, on the other hand, provides health coverage to eligible low-income adults, children, pregnant women, elderly adults and people with disabilities. While both programs pay for medical care, Medicaid pays for some services that Medicare doesn’t, notably long-term custodial care in a nursing home or assisted living facility. In a state where residential care facilities run $90,000 or more per year, this fact alone makes it important to consider what you can do to qualify for Medicaid, even if you are already receiving Medicare.
The Facts: Medicaid is needs-based; eligible individuals can only have a low amount of income and a low amount of countable assets. Spending down your assets is one way to reach Medicaid eligibility, but it is not the only way. By working with a Medicaid planning attorney, you can apply strategies that help you save money rather than spend it and still qualify for Medicaid. Moreover, spending down your assets in the wrong way can actually hurt your eligibility. For instance, Medicaid will look back at any transfers of assets or sales of property you made in the last five years to friends or family for less than market value. Such transfers can result in a denial of your Medicaid application or delay your eligibility for years. A Medicaid planning lawyer can advise you on the proper ways to spend down assets while utilizing other tools as well.
The Facts: The IRS allows you to give money to individuals every year up to a certain amount without impacting the gift tax. This limit is $17,000 in 2023. Giving money to children and grandchildren within this limit is a common tool for distributing an estate while avoiding or minimizing the Gift and Estate Tax, but it has nothing to do with Medicaid. For Medicaid purposes, cash gifts of any size would be considered transfers of property for less than market value and could be counted against you if made inside the five-year lookback period, delaying your eligibility for Medicaid.
The Facts: The well spouse’s assets can be counted against eligibility for the ill spouse who is applying for Medicaid. Some transfers are allowed up to a certain limit. For instance, while the Medicaid applicant can only have about $2,000 in countable assets, the well spouse can have well over $100,000 without impacting Medicaid eligibility. Also, Florida has a mechanism known as the spousal refusal that could allow the well spouse to retain an even larger share of assets. This tool was recently explained in a previous post.
The Facts: As long as you are still on the title, the property still counts as your asset and can count against you unless you take other measures to remove the asset.
The Facts: While it’s best to plan for Medicaid eligibility well in advance of needing long-term custodial care, our Medicaid planning attorneys often assist individuals with “crisis planning” to qualify for Medicaid as soon as possible after entering a nursing home while still preserving assets to the greatest extent possible. You can enter a nursing home as private pay and switch to Medicaid once you become eligible, so long as the nursing facility accepts Medicaid patients. You can’t be discriminated against for using Medicaid; you can’t be discharged for switching from private pay to Medicaid, and you don’t have to wait for a “Medicaid bed” to become available. Legal assistance might be necessary to enforce your rights.
The Facts: You can protect up to $688,000 in your home equity from creditors, including Medicaid, under Florida’s homestead exemption. This exemption helps you keep your home during your lifetime. Medicaid can seek reimbursement from your estate after you are gone, but it can’t take the home so long as your spouse or a disabled adult or dependent is living in it or you leave your home to your heirs at law.
Medicaid also cannot go after money put into certain types of trusts, such as Medicaid Asset Protection Trusts (revocable living trusts are insufficient to guard against Medicaid reimbursement). This is a complex area of the law, which is why it’s so important to plan for Medicaid eligibility with the help of a skilled and knowledgeable Medicaid planning attorney.
From early strategic planning to crisis planning, an experienced West Palm Beach Medicaid planning attorney can help you qualify for Medicaid without overburdening your estate or causing undue hardship on your spouse. If you are in need of a dedicated and thorough Florida Medicaid and estate planning attorney, contact the diligent West Palm Beach elder law attorneys of Shalloway & Shalloway at 561-686-6200.