Unfortunately, most nursing home residents end up spending all their hard-earned money paying for the Nursing Home (long-term care). Yet there are options! The time to plan for the possibility of nursing home care is before you need it! By doing planning in advance, you can pay for your long-term care and protect assets for your loved ones, through Medicaid planning. You worked hard all of your life to pay off your mortgage and save for your retirement. You expect to live off your retirement savings in the comfort of your own home, and leave something to your kids.
Eligibility for Medicaid depends on asset and income-level requirements
Medicaid is a joint federal-state program that provides medical assistance to various low-income individuals, including those who are aged (i.e., 65 or older), disabled, or blind. It is the single largest payer of nursing home bills in Florida and in America. Medicaid is the last resort for people who have no other way to finance their long-term care. Although Medicaid eligibility rules vary from state to state, federal minimum standards and guidelines must be observed.
In addition to you meeting your state’s medical and functional criteria for nursing home care, your assets and monthly income must each fall below certain levels if you are to qualify for Medicaid. However, several assets (which may include your family home) and a certain amount of income may be exempt or not counted.
Medicaid planning can help you meet your Florida's requirements
To determine whether you qualify for Medicaid, your state may count only the income and assets that are legally available to you for paying bills. Medicaid planning helps you devise ways of making your assets and income inaccessible. Over the years, attorneys have developed several strategies to rearrange finances and legally shelter assets from Florida. These strategies–and the Medicaid rules themselves–are complicated, and with each law change tightens restrictions on Medicaid planning. You should consult an experienced elder law attorney if you wish to take steps to protect your assets from Florida.
Shelter countable assets by turning them into non-countable or exempt assets
Countable assets are those that are not exempt by state law or otherwise made inaccessible to Florida for Medicaid purposes. The total value of your countable assets (together with your countable income) will determine your eligibility for Medicaid. Under federal guidelines, each state including Florida compiles a list of exempt assets. Usually, this list includes such items as the family home (regardless of value), prepaid burial plots and contracts, one automobile, and term life insurance. Through Medicaid planning, you can rearrange your finances so that countable assets are exchanged for exempt assets or otherwise made inaccessible to Florida. For example, instead of spending your savings solely on nursing home bills, you can pay off the mortgage on your family home, make home improvements and repairs, pay off your debts, purchase a car for your healthy spouse, and prepay burial expenses.
There are many other ways to shelter countable assets. Consult the experienced law firm Murphy & Downs, for more information.
Beware of certain Medicaid planning risks
Medicaid planning is not without certain risks and drawbacks. You should be aware of look-back periods, possible disqualification for Medicaid, and estate recoveries.
When you apply for Medicaid, Florida has the right to review, or look back, at your finances (and those of your spouse) for a period of sixty (60) months before the date you applied for assistance. Transfers of countable assets for less than fair market value made during the look-back period will usually result in a waiting period before Medicaid will start to pay for the Nursing Home. (A mathematical formula is used.)
Also, federal law encourages states to seek reimbursement from Medicaid recipients for Medicaid payments made on their behalf. This means that Florida may be able seek reimbursement from your estate after you die.