A Primer on Medicaid
The following information is relevant to the Institutionalized Care Program for Medicaid (ICP). The Department of Children and Families (DCF) manages this program in Florida. Medicaid is a joint federal/state program that helps pay for medical services for needy and low income persons. Services are provided by participating nursing homes that are reimbursed according to state formulas. Medicaid should not be confused with Medicare, which is a health insurance program run by the federal government to pay for hospital or other medical services for aged and disabled persons. The following is a summary of the ICP Medicaid rules.
Medical Requirements. The applicant must be in a nursing home or must have medical needs requiring nursing home placement. This determination is made at the time of the Medicaid application by a team of health care professionals at Florida Department of Elder Affairs called the CARES Team. The applicant must be a citizen or resident alien of the United States.
Income Requirements for the Applicant: The income requirement states that the applicant’s gross monthly income cannot exceed a certain figure. The 2016 figure has been set at $2,199.00. The income requirement is determined by DCF and changes each January. In October 1993, a federal law became effective which allowed applicants over the state-specified cap of $2,199.00 to establish an Irrevocable Medicaid Income-Only Trust and, therefore, become eligible for Medicaid. The Irrevocable Medicaid Income-Only Trust must be composed solely of the applicant’s income, and there are many other requirements. This trust cannot be used with hospice patients.
Income Requirements for the Well Spouse: There is no limit on the well spouse’s income. In 2016, if the well spouse’s gross monthly income is less than $1,991.00, then a portion of the applicant’s income is given to the well spouse. This allowance consists of two portions: (1) the amount needed to bring the well spouse’s income to $1,991.00; and (2) the amount needed to pay for extraordinary monthly expenses, such as a mortgage, above a $597.00 standard disallowance. The exact amount the well spouse receives from the applicant’s income will be determined by DCF. Please keep in mind that gross amounts of income are used in all calculations.
Asset Requirements for the Applicant: The asset requirements for Medicaid eligibility provide that the applicant cannot own countable assets in excess of $2,000.00, in addition to exempt and non-available assets. Therefore, it is imperative that the only asset the applicant owns is a checking account jointly held with the well spouse (and, if possible, another family member) for deposit of the applicant’s monthly income. All other assets of the applicant should be transferred to the well spouse immediately. The transfer of assets between spouses does not create any type of disqualification.
Asset Requirements for the Well Spouse: The asset requirements for Medicaid eligibility state that the well spouse can retain $119,220.00 (2016) in assets plus the exempt, non-available, and income-producing assets. Exempt assets are those a person is allowed to own and their value is not counted in determining Medicaid eligibility. Non-available assets (homestead, automobile, etc.) are not counted because the applicant or the well spouse has no means of accessing that particular asset. Assets that produce monthly income are counted as “income,” not assets, and are also not available. If assets do not fall into one of these categories, then they are countable. All countable assets are counted at their fair market value in determining Medicaid eligibility.
1. Homestead. The applicant’s homestead is considered exempt as long as the well spouse continues to reside in the homestead or the applicant intends to return to the homestead so long as equity in the homestead does not exceed $552,000.00. The equitable value in the homestead exceeding $552,000.00 is not exempt. The intent to return does not have to be based on true ability to return. DCF personnel are not allowed to request further information once it has been stated that the well spouse lives in the homestead or that the applicant intends to return to the homestead if the well spouse predeceases the applicant. Currently, in Florida, the DCF lien does not attach to the homestead if the homestead will pass to the owner’s children at the owner’s death. There is currently a move to change this rule and the homestead may be subject to the DCF lien in the future.
2. Motor Vehicle. One motor vehicle, regardless of age or value, is exempt. A second motor vehicle over seven years of age is allowed.
3. Property. Personal property is exempt as long as it does not include valuable art or jewelry.
4. Life Insurance Owned by the Applicant. Life insurance owned by the applicant, with total face value of less than $2,500.00, is exempt. Term life insurance policies have no cash surrender value and may be kept.
5. Life Insurance Owned by the Well Spouse. Life insurance owned by the well spouse, with total face value of less than $2,500.00, is exempt. Term life insurance policies have no cash surrender value and may be kept.
6. Burial Plan for the Applicant. A burial plan up to $2,500.00 is exempt. An irrevocable burial plan in any amount is also exempt.
7. Burial Plan for the Well Spouse. A burial plan up to $2,500.00 is exempt. An irrevocable burial plan in any amount is also exempt.
8. Income Producing Assets. Assets producing a fair market income are not counted as assets, only as income. The DCF lien will attach to these assets at applicant’s death if they are in the applicant’s name only.
The above has been presented as an introduction only to Medicaid eligibility and, as such, does not account for individual circumstances that will affect eligibility. This presentation is not legal advice, nor should it be used as such. Seek advice from an attorney who concentrates his or her practice in elder law and is experienced in Medicaid matters. Such attorneys are members of the National Academy of Elder Law Attorneys and members of the Elder Law Section of the Florida Bar.