Medicaid Planning and Eligibility in Florida
Clear legal advice from a Jacksonville lawyer
Receiving Medicaid benefits can be challenging. You should seek the legal support of attorney Todd Watson before you begin your Medicaid planning efforts towards achieving Medicaid eligibility.
Florida Medicaid planning
Medicaid planning involves the legal investment or structuring of funds or assets in order to satisfy the Medicaid eligibility income and assets test. The goal is to retain availability of your assets while utilizing the Medicaid Institutional Care Program to pay for your nursing home costs. The asset and income limit must both be satisfied. There are several options available for obtaining Medicaid eligibility. These include contracts for services, enhanced life estate deeds and proper investments.
Contracts for services
Personal service contracts are a popular method for satisfying the Medicaid asset eligibility test. This is often necessary because a Medicaid applicant’s available assets may not exceed $2,000.00. If the applicant is married and their spouse resides in the community, the value of countable assets owned by the community spouse may not exceed $109,560.00.
Under a contract for services, the applicant's assets are transferred to a trusted family member or other trusted individual in exchange for services which are not provided by the care facility. These may include—
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In order for a Lifetime Service Contract to be effective, the following requirements must be satisfied:
- The contract must provide services to the applicant that are over and above those supplied by the personnel of the nursing home or facility where the applicant resides.
- The amount of compensation paid to the service provider must not constitute an uncompensated transfer and the contract must clearly document that the amount paid to the service provider does not constitute an uncompensated transfer.
I can assist you in preparing contracts for services to reduce the assets of your elderly family member to achieve Medicaid eligibility. In addition, we will make certain that the Medicaid applicant and service provider clearly understand all income tax consequences arising from the services contract.
Qualified income trust
A Medicaid applicant's income must also be addressed. If monthly income exceeds the Medicaid eligibility cutoff—$2022 per month as of 2009—the applicant must create and fund an irrevocable qualified income trust, also known as a Miller Trust. Once the qualified income trust is created and Medicaid benefits are approved, all of the applicant’s income should be deposited into the trust each month and distributed as follows:
- The applicant retains $35 per month as their personal needs allowance.
- If the applicant is married and their spouse’s income is less than the Monthly Maintenance Income Allowance (which is $1,822.00 per month for 2009) an amount equal to the difference between the spouse’s income and the MMIA will be paid to the community spouse.
- The trustee may pay certain health insurance premiums.
- The balance of the applicant’s income is paid to the nursing home or other institution or other facility providing for their care.
Proper management of a qualified income trust is crucial. Monthly income must be made properly managed during the month received. We can assist you with the creation, funding and administration of a qualified income trust.
Florida Medicaid eligibility
Obtain legal advice on qualifying for nursing home (Institutional Care Program) benefits in Jacksonville. The list of rules for Florida Medicaid eligibility may appear straightforward. However, successfully meeting the requirements for nursing home coverage can be a difficult task which requires the support of an attorney. To obtain Medicaid nursing home benefits, the applicant must satisfy certain categorical, income and asset requirements.
Categorical requirements for Medicaid benefit eligibility
To be eligible for Medicaid nursing home benefits in Florida, a person must —
- Be a U.S. citizen or a qualified alien
- Be a Florida resident
- Be blind, disabled or 65 years of age and need assistance with three or more activities of daily living (ADLs)
An individual will be considered as being in need of nursing home placement if the individual is unable to perform three or more of the following ADLs:
- Independently walk and stand or be able to ambulate independently
- Feed oneself
- Clothe oneself
- Bathe oneself
- Perform basic toilet functions
The individual must also—
- Satisfy the income limit
- Satisfy the asset limit
Income and asset limitations for Medicaid ICP benefit eligibility
The greatest challenge in achieving Medicaid nursing home benefits is meeting the income and asset limitations:
- Monthly income may not currently exceed $2,022.00
- Countable assets may not exceed $2,000.00
If the applicant is married and their spouse resides in the community, the value of countable assets owned by the community spouse may not exceed $109,560.00.
The value of certain assets is not included in determining whether or not the assets limitation test is satisfied. These assets are called exempt assets. Below is a list of the exempt assets the value of which is not included in determining whether or not the Medicaid applicant and his or her spouse, if married, own more than the allowed value of assets:
- Under federal and state law the homestead of the applicant is considered exempt as long as it has an equitable value of less than $500,000.00. For these purposes, equitable value means the fair market value of the home less the amount of debt encumbering the property.
- Household goods and other personal items having a total equity value of $2,000.00. (As a general rule, all tangible personal property, household furnishings and personal effects are deemed to have a value of $2,000.00 or less unless the applicant owns antique furnishings, pieces of art or collectors items of significant value.)
- One wedding ring and one engagement ring, regardless of value.
- One motor vehicle regardless of age or value.
- Assets that produce a fair market income on a monthly basis are not considered as assets, but are considered income. Such assets may include rental property, but does not include IRAs, mutual funds, stocks, bonds, etc.
- Cash surrender value of life insurance, if the total face value of all life insurance on any one person does not exceed $2,500.00.
- Burial plots for the applicant and immediate family.
- A burial plan having a value of up to $2,500.00 for the applicant or an irrevocable burial plan for the applicant in any amount.
Many people need Medicaid ICP coverage to afford nursing home care, but do not initially meet the asset or income test.
Strategies for achieving Medicaid ICP eligibility
Just as there are legal methods for reducing federal estate and income tax liabilities, there are legal techniques for reducing an applicant’s income or assets in order to obtain Medicaid nursing home benefits. These techniques may include—
- Qualified income trust
- Enhanced life estate deed
- Contracts for lifetime services
- Other investment strategies
Speak to a qualified Jacksonville Medicaid attorney
For a free phone appointment with a Medicaid planning and eligibility lawyer in Jacksonville, contact Todd Watson, Attorney at Law, P.L.
