Can I Avoid Medicaid Spend Down & Still Qualify for Medicaid in Florida?

The Statewide Medicaid Managed Care Long-Term Care program is a needs-based program, and eligibility is determined by both income and asset levels.

• Income and Asset Limits. Florida has set income and asset limits for Medicaid eligibility. If your income and assets are over these limits, you may need to engage in Medicaid planning to become eligible for home and community-based services and support, as well as the Institutional Care Program, which helps pay for a nursing home. As experienced Winter Park Medicaid planning attorneys, we can assess your situation and provide guidance regarding other legal tools that may be available to preserve your assets.

• Types of Assets. It’s important to differentiate between countable and non-countable assets. Countable assets include things like cash, stocks, bonds, and certain types of property, which are considered in determining Medicaid eligibility. Non-countable assets, such as your primary residence (subject to certain conditions), one vehicle, personal belongings, and certain types of life insurance and burial plots, are not considered in your eligibility determination.

• Exemptions and Protections. There are various exemptions and protections, especially for spouses of Medicaid applicants, that can affect the most appropriate asset protection strategy. For instance, the Spousal Impoverishment Protection allows the non-applicant spouse to retain a certain amount of the couple’s combined assets.

Medicaid planning can be complex, and the rules can change from year to year. Consulting with an experienced Orlando Medicaid asset protection attorney is essential to ensure compliance with current laws and to make the most informed decisions for your situation.

Countable assets are those assets considered by Medicaid when determining an individual’s financial eligibility for the program. Common types of countable assets include:

• Cash. This includes money in checking and savings accounts, as well as cash on hand.

• Bank Accounts. The balance in your checking and savings accounts is considered a countable asset.

• Stocks and Bonds. Any investments in stocks, bonds, mutual funds, and other similar financial instruments are countable.

• Certificates of Deposit (CDs). The value of CDs you own is included as a countable asset.

• Real Estate (Other than Primary Residence). Other real estate you own, such as vacation homes or rental property, is typically counted. Your primary residence is generally exempt, subject to certain equity limits and conditions.

• Additional Vehicles. While one vehicle is generally exempt, a second vehicle can be exempt if it is over seven years old but under twenty-five years old.

• Retirement Accounts. If you have periodic payments coming out of your retirement accounts, then the whole value of those accounts is not counted as an asset.

• Life Insurance Policies. If you have a whole-life policy with a face value of more than $2,500, the cash value will be counted as part of your assets. Because term policies have no cash value, they are exempt assets.

• Annuities. Depending on the type and terms, some non-qualified annuities may be counted as assets.

• Other Personal Property. This can include valuable personal property that could be converted to cash, such as jewelry, art, and collectibles.

In Florida, non-countable assets, also known as exempt assets, are those that Medicaid does not consider when determining an individual’s eligibility for the program. These assets are excluded from the asset limit calculation. Some of the primary non-countable assets for Medicaid eligibility in Florida include:

• Primary Residence. The applicant’s primary home is exempt from being counted as an asset, provided the equity value does not exceed a certain limit (which can be subject to change). If the Medicaid applicant is married and the spouse continues to live in the home, it remains exempt regardless of value.

• One Vehicle. One car is generally exempt, regardless of its value, if it is used for the transportation of the applicant or a member of their household.

• Household Goods and Personal Effects. Furniture, appliances, and personal belongings are typically exempt.

• Prepaid Funeral Plans. Irrevocable prepaid funeral plans and a certain amount set aside for burial expenses are exempt.

• Life Insurance Policies. Life insurance policies may be exempt, depending on their type and value. For instance, a term life insurance policy with no cash value is exempt, and a whole life insurance policy may be exempt up to a certain face value.

• Certain Retirement Accounts and Pensions. These can be exempt, particularly if they are in payout status.

• Special Needs Trusts and Pooled Trusts. Assets in a special needs trust or a pooled trust set up for the benefit of a disabled individual are generally not counted.

Not necessarily. While spending down is commonly used to qualify for Medicaid, we place an emphasis on using alternative Medicaid planning methods, such as asset protection and advanced saving strategies.  As Orlando Medicaid asset protection lawyers, we explore every avenue to preserve your assets while achieving Medicaid eligibility.

For example, if an individual’s total assets exceed Medicaid’s limit, they can often reduce countable assets to become eligible by using countable assets to fund non-countable items or expenses, such as paying off debt, home repairs, funeral and burial plans, or other Medicaid-approved expenses.

Safely converting countable to noncountable assets before applying for Medicaid in Florida involves careful planning and adherence to Medicaid rules to ensure eligibility without facing penalties.

The following are several strategies that are often utilized to help Floridians meet the Medicaid income and asset limits:

• Pay Off Debts and Expenses. Use excess assets to pay off debts, including mortgages, car loans, and credit card debts. You can also pay for home repairs, improvements, and modifications, especially those needed for medical reasons.

• Medical and Care Expenses. Pay for unreimbursed medical expenses, such as, paying for prescription drugs, doctor visits, and long-term care expenses.

• Prepay Funeral and Burial Expenses. Invest in an irrevocable funeral trust or prepay funeral and burial expenses. These are considered allowable spend-down methods in Florida.

• Purchase of a Primary Residence. If you do not own a home, using assets to purchase a primary residence can be a strategy, as the home is generally considered a non-countable asset for Medicaid eligibility. However, generally, you must live in the home for one year before applying for Medicaid.

• Home Modifications. If you or a family member has a medical condition that requires modifications to your home (like wheelchair ramps, grab bars in the bathroom, etc.), countable assets can be used to fund these expenses.

• Personal Services Contracts or Care Agreements. Paying a family member for caregiving services through a formal personal services contract or care agreement can also be a way to convert assets. However, it’s crucial to have a legally binding contract and to pay fair market rates for these services.

• Purchase of a Vehicle. Buying a vehicle for the Medicaid applicant or their spouse can be a permissible asset reduction strategy if the vehicle is used for the benefit of the applicant.

• Establishing a Qualified Income Trust. If your income is over the Medicaid limit, a Qualified Income Trust, also called a Miller Trust, can help you qualify by directly depositing income into the trust, which is then used to pay for your care.

Each situation is unique, so it is vital to tailor each asset protection strategy to the specific circumstances. If you need assistance avoiding penalties and ensuring you (or a loved one) maintain eligibility for Medicaid benefits, we encourage you to call our office to schedule a consultation with an experienced Orlando Medicaid planning lawyer.

The Medicaid lookback period in Florida is a critical aspect of the eligibility process. It refers to the five-year period before your Medicaid application, during which all asset transfers are scrutinized. Transfers made for less than fair market value may result in penalties or disqualification.