Medicaid Myths

Florida Medicaid Myths

Getting Medicaid will relieve many financial burdens, including potential help with paying the expensive costs of Nursing Homes or other long-term care Facilities. But it’s not easy! Applying for Medicaid requires a lot of planning, and there are often miscommunications about the qualifications, how to apply and what is required. Do not let these myths deter you from getting the care you need. Here, we will address four common Medicaid myths and how they play out in Florida law.

Myth #1: You must get rid of all of your assets to qualify for Medicaid.

False: It may not be much, but you can have assets. Here’s how it breaks down:

If you are the applicant applying for Medicaid you can only have $2,000.00 of countable assets. As of January 2016, your spouse also referred hereto as, “community and/or well spouse,” can have up to $119,220.00 of countable assets. There are, however, strategies to allow the community spouse to keep more than $119,220.00 Also, not all assets will be counted and contribute to that $2,000.00 limit. You may have to arrange or transfer some of your assets, but you can still continue your standard of living and apply for Medicaid.

Since Institutional Care Medicaid (ICP) only pays the room and board of the nursing home, as well as the Medicare Part B premium, you can do Medicaid planning to save some or most all of your assets by making your assets exempt. Changing assets from non-exempt to exempt is part of the Medicaid Plan. All planning is done with complete disclosure to the government and complies with the federal law.

Tip: Begin Medicaid planning early and make sure you have a well written Durable Power of Attorney that includes public benefit language. You will have more time to calculate your assets, make the appropriate transfers, and prepare for an easy Medicaid application.

Myth #2: You can only give away $14,000 a year.

Truth: This is true, but not due to Medicaid law. This is a federal gift tax rule. And, in fact, the Medicaid rules are even more restrictive.

For every non-exempt transfer within the past five years, you can be penalized in the form of losing your benefits for a period of time.

Here’s how it works. Let’s say you are approved in July of 2016. If you did not make any non-exempt transfers your benefits begin immediately. For reference, an exempt transfer is a gift and/or transfer you made and you received less than fair market value compensation for the transfer.  However, let’s say you gifted $25,000 to your son two years ago and another $25,000 to your daughter last year. Because those gifts are considered non-exempt, you will be penalized for them – your benefits will be delayed a specific amount of time.

How do you calculate that penalized time? As of June 2016, the government given divisor is $8,662.00. Take the total amount of gifts you made, $50,000 divided by $8,662.00 = approx. 5.77. Essentially, you will not be covered for nursing home costs for about 6 months.

Tip: Remember that not all states treat Medicaid procedures the same way, and that laws are constantly changing.

Myth #3: A Durable Power of Attorney Can Handle My Medicaid Needs.

Truth: By specifically giving your agent under a Durable Power of Attorney the ability to apply for Medicaid and transfer assets, your agent will be able to help you apply for and receive Medicaid payments. In most cases, by the time a person needs or would like to apply to Medicaid, they are often, though not always, considered physically or mentally incompetent. If they are mentally incompetent, they may not be able to make some of the necessary decisions and or be able to consent to transfers to apply for Medicaid. Having a well written Durable Power of Attorney is an easy fix to that problem.

Tip:  The language in your Durable Power is extremely important in whether your agent can implement a Medicaid plan. If you’re unsure about your Durable Power of Attorney, please contact an Orlando Elder Law Attorney for review.

Myth #4: I Have to Transfer My Assets Five Years Before I Can Apply for Medicaid.

False:   In 2005, Medicaid increased the look-back period from three to five years, even if you don’t have a trust. However,, you are still able to get Medicaid without planning five years in advance. This is called crisis planning. The five years refers to the lookback period that comes into play when you apply for Medicaid. The lookback period means that Medicaid caseworkers will look at your finances and records from five years before you applied. However, this does not mean you have to wait five years to apply.

Tip:   Instead of waiting, contact Orlando Elder Law Attorney Kathleen Flammia today to plan early, rearrange your assets, and file your Medicaid application so that it is done correctly.

 

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