Your Golden Years have arrived, and it is time for great things such as retirement, traveling, spending time with grandchildren, honing your cooking skills, etc. The list goes on and on. There is one more planning strategy you need to consider – putting yourself in a situation where you will be eligible for Medicaid benefits in Florida down the road (if and when you need them.)
Hopefully, you look and feel healthy right now, but our bodies can play tricks on us. When it comes to the health of older adults, you should add to your arsenal a planning strategy that is focused on paying for long-term medical care, a/k/a an assisted living facility or a nursing home. This can be achieved by becoming eligible for the Florida Medicaid Institutional Care Program (“ICP”). ICP is a program that can assist senior citizens to pay for medical care. If you qualify, it is a fantastic benefit to have. Other methods of payment often include purchasing a private long-term care insurance, Medicare benefits, or most often – a combination of strategies.
Under current laws, Florida Medicaid planning is a well thought out game plan to safeguard as much of your estate as possible, while allowing you to qualify for Medicaid. It is important to understand the basis strategies that elder law attorneys adopt to preserve your assets and find the way to get the long-term medical costs covered. First, you should have a basic understanding of the difference between Medicare and Medicaid.
- How Medicare works: The Medicare program has been administered by the Federal Government since 1966 across the United States. It is a federal plan, and the coverage does not vary from state to state. This type of insurance is for individuals who are 65 and older and have paid into the system, as well as for certain young people with disabilities or people with end-stage renal failure requiring dialysis or a transplant. Medicare is a cost-sharing program with co-pays and deductibles and has about 50 million insured individuals. It is projected that in 2029 there will be closer to 80 million insured individuals, which could lead to dwindling funding.
- How Medicaid works:The Medicaid program is for low-income individuals and families and is state-specific. This means the eligibility requirements to qualify for Medicaid will vary based on the state you reside in. Your home State and the Federal Government share the cost of this program. Medicaid services in Florida are administered by the Agency for Health Care Administration and the eligibility is determined either by the Florida Department of Children and Families or the Social Security Administration. Medicaid for individuals with low-income who are aged 65, older or are disabled is called SSI (Supplemental Security Income). Floridian residents who are eligible for SSI are automatically eligible for Medicaid coverage – there is no need to file a separate access for a Florida Medicaid Application unless nursing home services are needed. To qualify for Medicaid in Florida as of 2020, an individual may have not more than $2,349.00 per month in income and no more than $2,000 per month in assets (in the month of applying for Medicaid). Take note that Medicaid has different types of need-based programs, and the qualifications for Medicaid verses the Medicaid Institutional Care Program (ICP) vary, with the ICP program having more stringent requirements to get approved.
The Institutional Care Program (ICP) a/k/a Nursing Home Medicaid in Florida is a Medicaid program that helps people in nursing facilities pay for the cost of their care plus provides general medical coverage. Medicaid can pay for intermediate & skilled care for an unlimited time period. Nursing facility services includes on-site doctor visits, activities, food (including therapeutic diets and special dietary supplements, oral/tube feeding if needed), laundry, skincare, personal hygiene care, incontinence supplies, all general nursing services, medical equipment and supplies, rehab, physical therapy, occupational therapies and speech therapies, and more. Without Medicaid, families often find themselves plowing through their savings and liquid assets to pay the incredibly high monthly premiums for such nursing home care. We can help. Our experienced elder law attorneys offer your family practical strategies, often with proactive planning, that will allow you to qualify for Medicaid later in life. What are some of these “practical” strategies we employ?
Strategies Used to Qualify an Individual for Medicaid ICP
- Distinguishing between countable and non-countable assets. For example, your Homestead in Florida is excluded from Medicaid, if you, your spouse, or children live there.
- Medicaid Look-Back-Period and Penalties. You need to know that when you are planning to apply for Medicaid ICP, you cannot transfer assets to others for less than fair value and then apply. This is viewed as a “gift” and will cause a penalty period on your application. The Deficit Reduction Act of 2005 increased the look-back-period to 5 years and changed the penalty period, so it now begins from the time of eligibility and not from the time of application.
- Personal Service Contracts for Medicaid: these agreements are allowable under the Florida Medicaid planning rules for the purpose of compensating family members for providing necessary services in accordance with daily living, housekeeping, monitoring health care, bookkeeping, etc. These agreements are often funded by big upfront lump sum payments for future services and based on the expectation of life of the applicant.
- A Medicaid Asset Protection Trust is an Irrevocable Trust. You, as the “Grantor” create the Trust, fund it with certain assets, and name an individual “Trustee,” other than you or your spouse, to manage the Trust. You can specify exactly how the assets should be managed and you will be entitled to all the income for the rest of your life. The principal of the Trust assets will remain in the Trust until your death. When you pass away, the Trust assets will pass directly to your designated heirs. A great benefit to this Trust is that your heirs receive the assets without going through the probate estate administration process with the Court.
- The $14,000 IRS gift tax exemption rule does not apply to Florida Medicaid planning, so this approach would likely result in a penalty period, delaying the Medicaid benefits due to the look-back-period of 5 years.
As you can see, Medicaid ICP requirements are stringent. Likewise, these types of Trusts and Personal Service Contracts are highly complex. We have experience with married couples where only one spouse is seeking eligibility to the Medicaid ICP program. Our elder law attorneys will guide you through the process and advise which strategies are right for you. You can invest in your family’s future by protecting your assets today. We employ legal and ethical strategies to prevent you from having to spend down all your hard-earned assets on crucial medical care for your loved ones.
Our law firm can conduct all consultations over the phone and facilitate concierge signing right from your home. We speak English, Spanish, and Russian. Contact OC Estate and Elder Law at (954) 251-0332 or info@ocestatelawyers.com to receive a free consultation today.
