Qualifying for Medicaid Long-Term Care in Florida

It is estimated that 70% of the American population will require long-term care at some point in their lives. However, most people do not have the resources to pay for extended stays in nursing homes. Florida's Medicaid ICP (Institutional Care Program) is the insurer of last resort for long-term care. This article discusses the financial criteria for Medicaid ICP, and how we assist our clients to become eligible for this critically important program.

The Care Conundrum

As we live longer, we are more likely to need long-term care.

According to Genworth, the average cost of care in a Florida skilled nursing facility in 2021 is $117,804/year. The average cost of care in a Florida assisted living facility is $44,400/year.

Unfortunately, long-term care is not covered by health insurance. Medicare only covers temporary long-term care that involves recovery from a hospital stay. Patients are expected to plan for the need for long-term care and pay for it outright or through long term care insurance (which is expensive, and is owned by fewer than 10% of American adults).

As a result of this state of affairs, a huge number of people who develop a sudden need for long term care find that they are not able to pay for it. Fortunately, there is another option.

Medicaid ICP is the Payer of Last Resort

Medicaid is a Federal/State Partnership that funds medical care and long term care for the financially needy. Medicaid ICP pays for long-term care for individuals who are both medically and financially qualified. The financial criteria for eligibility for ICP are exacting. For this reason, it is important to use a qualified medicaid planning attorney to assist you in the application process.

Medicaid ICP Financial Criteria

• Asset Limit: Individual: owns $2,000 or less of non-exempt assets, Married couple: owns $3,000 or less of non-exempt assets
• Income Limit: Individual earns less than $2,382/month in non-exempt income, Married Couple: earns less than $4,764 in non-exempt income

The criteria above would seem to exclude all but the very poor from eligibility for Medicaid ICP. However, there is a significant "loophole" in the asset test. Only non-exempt assets are counted against eligibility, while certain common forms of wealth constitute "exempt" assets (including homesteaded real property worth up to $600,000).

You Need An Attorney's Help To Avoid the Medicaid Gifting Penalty

Not only are the medicaid ICP eligibility rules complicated, but Medicaid levies a penalty against an applicant who transfers assets for less than fair market value during the five year period prior to applying for benefits. This penalty is a period, measured in months, during which the applicant is ineligible to receive medicaid ICP.

The Medicaid penalty period is calculated using a state formula:

• Add up the gifts made by applicant in the last 5 years.
• Divide by the Florida Medicaid Penalty divisor (avg monthly cost of a nursing home in FL). The penalty period divisor as of March 2021 is $9,703.
• The result is the number of months that Medicaid will not pay.

The penalty period starts from the date of the transfer or the date the applicant applies to Medicaid and is otherwise eligible, whichever is later.

The gifting penalty can create a huge financial burden for the medicaid applicant and his family. We help our clients avoid or minimize the gifting penalty by spending or lending assets for fair market value.

How We Can Help You to Transfer Assets to Qualify for Medicaid ICP

We use financial and legal tools to help our clients become financially eligible for Medicaid ICP while protecting their assets and income. We can assist you whether you are planning for nursing home care in 5 years or 5 days.

While Medicaid ICP's asset limit is very low, there are some important exempt assets that a Medicaid applicant can purchase without incurring a penalty. Also, Medicaid may not penalize an individual for using his money to purchase assets for fair market value. Guided by these principles, I assist Medicaid applicants to spend down or lend their assets so that they become eligible for Medicaid ICP and avoid or minimize the gifting penalty.

Every person who applies for Medicaid ICP has a unique financial situation. We analyze the finances of each medicaid client, and then, work out a plan with the client to become financially eligible for Medicaid ICP while striving to preserve the client's wealth. Strategies that we have successfully used to transfer client's assets without incurring a gifting penalty include:

• Personal Service Contracts
• Promissory Notes
• Deeds for the Purchase of Real Property

If you or your family member needs assistance to apply for Medicaid long-term care, call John Clarke at (954) 556-8952 for a free consultation.