Medicaid Eligibility and Estate Planning in Florida
According to the Florida Health Care Association, the average cost of care in a Florida assisted living facility is around $48,000 per year, with a private room in a nursing home costing even more – around $100,000 per year. These types of costs are simply untenable for the majority of Floridians, and because of this, it is usually necessary for an older person to explore how Medicaid can be used to help cover costs. There are specific criteria that must be met for a person to be eligible for Medicaid, however, since it is a need-based program, it typically requires the services of an experienced estate planning attorney to ensure that you can meet the requirements.
Eligibility Criteria Can Be Confusing
It may seem far too early to think about Medicaid planning, especially if you and your loved ones are generally healthy – but when you are healthy is by far the best time to contemplate these issues, as you will have far more pressing concerns on your proverbial plate when you are ill. If you begin to consider costs early, you may also have a chance to save more so that you can handle some of those future costs yourself. However, Medicaid has an income test as part of its eligibility criteria; if you have more than $2,000 in assets and/or make more than $2,349 per month, you may not qualify (some assets, however, are exempt), depending on the program.
There is also a needs test, to determine whether someone is better suited for assisted living or for nursing home care. If you do not require nursing home care, Florida Medicaid is not likely to pay for the entirety of your care, or may require that you seek a Medicaid waiver so that you can receive care in the community instead of paying for a placement in an assisted living facility. Generally, the state wants to ensure that someone needs both institutional care and cannot pay for it themselves, before approving them for Medicaid. However, the process of determination can be quite complex for the average person to navigate.
Overcoming Income & Asset Limits
When applying for Medicaid, there are legal procedures that you can use to help you meet the eligibility criteria. One of the most commonly seen is referred to as a qualified income trust (QIT), also known as a “Miller” trust, and it is a trust set up for the express purpose of “owning” income to get around Medicaid asset limits. If you make more than $2,349 per month, you can establish a QIT and place an appropriate amount of income into the trust – for example, if you make $2,600 per month, you would deposit at least $252.00 in the QIT each month (though it is generally suggested to add more, in case your income were to deviate at any point). That money would then be used by the trustee to pay off any medical bills that Medicaid will not cover.
QITs are only useful for those who have income over the limit, however; if you have too many assets, you might want to consider creating what is referred to as a Medicaid trust. A first-party Medicaid trust can own any assets that would put you over the asset limit. A caseworker investigating a Medicaid application will “look back” up to 5 years for any transfers made to or from the applicant.
Contact A Florida Estate Planning Attorney
Medicaid planning must be an integral part of any estate planning discussion that you and your loved ones have. If you are unsure where to start, or have other questions, a Naples estate planning attorney at Nici Law Firm will be happy to sit down with you and try to advise you regarding your best options. Call us today at 239-449-6150 or use our web form to schedule an initial consultation.