There is a significant chance you will need to qualify for Medicaid during your retirement years to cover the high cost of long-term care. If so, the combined value of your non-exempt assets to prevent you from qualifying. To help you plan accordingly, the Coral Gables Medicaid planning attorneys at Stivers Law explain the guidelines for determining eligibility for Medicaid for seniors in Florida.
Will I Need to Qualify for Medicaid as a Senior?
If you never relied on Medicaid during your working years, you are undoubtedly wondering why you would need to plan for the need to qualify for Medicaid as a senior. The need for Medicaid may arise from the need for long-term care (LTC) at some point during your retirement years. With the average cost of LTC running over $100,000 a year nationwide (as of 2021), and an even higher average of almost $120,000 per year in Florida, the average person cannot afford to over that cost out of pocket. Although Medicare will likely cover most of your healthcare costs as a senior, it will not pay for LTC nor will most basic health insurance plans. Unless you purchased a separate LTC plan that may leave you faced with paying out of pocket unless you qualify for Medicaid. Medicaid does cover LTC expenses; however, the Medicaid eligibility guidelines for seniors could be problematic if you did not include Medicaid planning in your estate plan.
Florida Medicaid for Seniors Eligibility Guidelines
Because Medicaid is considered a “needs-based” program, an applicant must demonstrate financial need to be approved. To do that, you must not have income or “countable resources” above the applicable threshold. The “countable resources” limit is very low in most states, including Florida. An individual applicant cannot have countable resources worth more than $2,000 while a married couple is limited to $3,000. If you your countable assets exceed the limit at the time you apply, your application will be denied, and you will have to “spend-down” your assets before applying again. Some assets are exempt, meaning they do not count toward your “countable resources,” including:
- Your home, up to an equity limit of $630,000 if you are planning to return to the home.
- Your automobile with no equity limit.
- An irrevocable burial trust with no limit
- Household furnishings, furniture, clothing, jewelry, and other personal effects.
- IRA in payout status (note: the payouts will likely count toward your income limit)
How Can Medicaid Planning Help?
There was a time when you could transfer assets to an adult child or other loved one in anticipation of the need to apply for Medicaid. Transfers such as those, however, are no longer allowed. Medicaid now uses a five-year “look-back” period that prevents transfers of assets for less than fair market value for the 60-month period prior to an application for Medicaid. A review of your finances will be conducted when you apply for Medicaid and if any such transfers are uncovered, Medicaid will likely impose a waiting period. The length of the waiting period will depend on the value of the assets transferred and the average cost of LTC in your area. For example, if you transferred assets valued at $200,000 with an average monthly cost of LTC in Florida of $9,800, you would incur a waiting period of 20 months ($200,000/$9,800). During that waiting period you will be forced to cover the cost of LTC on your own. By incorporating Medicaid planning into your comprehensive estate plan ahead of time you can protect your hard-earned assets and make sure you will be eligible of you need to qualify for Medicaid as a senior.
Contact Coral Gables Medicaid Planning Attorneys
For more information, please join us for an upcoming FREE webinar. If you have additional questions or concerns about the need for Medicaid planning within your estate plan, contact the experienced Coral Gables Medicaid planning attorneys at Stivers Law by calling (305) 456-3255 to schedule an appointment.