Do I Have to Spend All My Savings to Qualify for Medicaid in a Nursing Home or Assisted Living Facility?

Retirement savings spent on qualifying for Medicaid

The cost of long term care in Florida is on the rise, and many seniors have questions and concerns regarding their eligibility for assistance.  According to a survey conducted for one of the largest long-term care insurance providers, Genworth, a private nursing home room in Florida cost $8,882 per month in 2017.  The average cost of assisted living was $3,100 per month in 2017.  Without the proper plans in place, you run the risk of losing all your savings, and everything you’ve worked hard to accumulate, in order to qualify for Medicaid coverage.

What About My Nest Egg?

Although planning for your future can be complex and overwhelming, there are ways you can ensure you will receive the governmental benefits that you are entitled to, without spending all of your hard-earned life savings. This is where proper Medicaid planning comes into place.

Am I Eligible for Medicaid Benefits?

Medicaid eligibility for long term care is determined by the Florida Department of Children and Families (“DCF”) based on state and federal law.  Be Careful – eligibility depends on your assets and income at the time you apply for benefits plus any gifts, donations, transfers of real property, and other transactions made in the five years before the application.  This is the “5 year look back period” that you may have heard about.  More about this later.

To qualify for Medicaid assistance for long term care in Florida, your gross monthly income must not exceed $2,250, and your assets must not exceed $2,000. Your homestead and one motor vehicle are exempt and not counted toward these amounts.

Some additional assets, such as small life insurance policies and prepaid funeral and burial services, are also exempt.  You can still qualify for assistance if your monthly income exceeds $2,250 by creating a “qualified income trust” (QIT).  Only an attorney can draft a QIT.

If you are over 65 years’ old, your spouse’s assets and income will not count against your Medicaid eligibility.  However, joint assets do count, with 50% attributed to the applicant spouse.  Spouses with joint assets almost always benefit from consultation with an elder law attorney about Medicaid eligibility.

If you do not meet the criteria for Medicaid eligibility, an elder law attorney can often help restructure assets so that you become eligible.  Do not spend all of your hard-earned assets without speaking to an elder law attorney about alternatives.

How Can I Plan for My Future?

Everyone should have proper legal documents in place to ensure that a trusted advisor will be able to help in case a tragedy strikes. As you get older, it is imperative that you have such documents in place.

A durable power of attorney, will, living will, health care directive, revocable trust, or other document will ensure that a trusted advisor can manage your affairs and assist in accessing Medicaid benefits and medical assistance. Although many people do not need all of these documents, everyone should have a durable power of attorney, will, and health care directive.  Without these documents, you may be subjected to a court-supervised guardianship and lose control of your assets and even your rights.

An Unexpected Tragedy Happened and I Need Medicaid Benefits Now

If you or a loved one are facing nursing home or assisted living care, an elder law attorney can help you examine or create legal life plan documents and determine Medicaid eligibility. If you do not automatically qualify for Medicaid benefits (you automatically qualify if your income is less than $2,250 per month and your assets are less than $2,000), you may be able to qualify by using one or more of the following strategies:

  • establish a qualified income trust,
  • transfer assets to a pooled trust,
  • transfer assets to a spouse,
  • provide for a disabled child,
  • enter into a personal services contract (also called a lifetime services contract) between you and another party or parties,
  • invest in rental properties
  • other strategies.

Each of these strategies must be implemented properly and reported to DCF with the Medicaid application.  An elder law attorney will help ensure that the application is correct, all transfers have been made and documented correctly, and all of the eligibility requirements have been met.

As a general rule, it is best to create all of the legal life plan documents, make all of the acceptable transfers of assets, establish the qualified income trust, and submit the Medicaid application before the last day of the month for which you wish to receive Medicaid benefits.

If you or a loved one are in a hospital expecting to be transferred to a nursing home or “rehab,” the best time to speak with an elder law attorney is right away.  If you or a loved one are receiving Medicare benefits for rehabilitation and may need services after rehabilitation, either in your home, in assisted living, or in a nursing home, it is critical that you speak with an elder law attorney now.  If you wait, you may lose important benefits and unnecessarily spend $9,000 per month for care.

The Takeaway

It is recommended that you plan in advance for the possibility of long term care. Medicaid benefits are very beneficial in ensuring that your life savings are not depleted by your long-term care needs. The eligibility requirements for Medicaid can be very confusing, and often urgent. If you need Medicaid benefits immediately as a result of a sudden illness or tragedy, an elder law attorney help ensure that you receive the benefits you are entitled to.

If you or a loved one may need long term care now or in the future, call today. Do not wait, because your assets may be at risk.

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