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Important Information and Recent Articles:
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MEDICAID DESK REFERENCE
(FLORIDA LONG-TERM CARE PROGRAMS – Figures Current as of 9/20/2011)
ASSET TEST:
INDIVIDUAL MEDICAID RECIPIENT: An individual Medicaid recipient may have the following exempt assets: a home with an equity value not to exceed $506,000; a vehicle of any value regardless of use; all automobiles seven years or older that are not luxury or collector’s items, pre-paid burial, provided it is irrevocable; a separate burial bank account in addition to pre-paid burial with a balance up to $2,500; life insurance with a face value of up to $2,500; and $2,000 of other liquid assets.
INDIVIDUAL WITH COMMUNITY SPOUSE: In addition to the asset listed above, if there is a Community Spouse, then the following assets are considered exempt: a home of any value (no $506,000 equity limit); the Community Spouse may have their own prepaid burial, burial fund, and life insurance; the Community Spouse may have an additional $109,560 of assets.
INCOME TEST:
INDIVIDUAL INCOME CAP: An individual Medicaid applicant can have gross monthly income not to exceed $2,022. If the applicant’s income exceeds this amount, a Qualified Income Only Trust must be created and a separate bank account must be opened. Each month any income above the cap must be deposited into the Income Only Trust bank account to remain eligible for Medicaid. (Note: to avoid the risk of future ineligibility caused by increased income, it is recommended that all of the applicant’s income be transferred into the Income Only Trust except the Personal Needs Allowance of $35 and enough to pay the secondary health insurance premium each month).
WHO MAY CREATE INCOME ONLY TRUST: The Applicant, the Applicant’s spouse, or an Agent pursuant to a Durable Power of Attorney or a Court Appointed Guardian. Note: a Power of Attorney must specifically state the right to create and fund a trust in order to be utilized. A general right to do everything in a Power of Attorney or for the Agent to fund an existing Trust is not sufficient. Florida Statutes on Powers of Attorney concerning what is required to be included and how it is to be signed changed October 1, 2011, as well as other changes concerning this important document !
DIVERSIONS OF INCOME TO COMMUNITY SPOUSE: A Community Spouse is permitted to have unlimited income and still have the Applicant spouse qualify for Medicaid benefits. If the Community spouse’s income is low enough, they may be entitled to a diversion from the Applicant spouse’s income. There are two diversions possible: Minimum Monthly Maintenance Income Allotment (MMMIA) and Excess Shelter Cost. Minimum Monthly Maintenance Income Allotment is a diversion from the Applicant spouse’s income to the community spouse necessary to make the Community spouse’s gross monthly income $1,839 per month. Excess Shelter Cost is a diversion from the Applicant spouse’s income to the community spouse for shelter costs that exceed $552 per month. Shelter costs include mortgages, taxes, insurance, homeowner’s dues and a fixed amount of $182 a month for utilities.
The foregoing “Desk Reference” is meant to provide a general synopsis of Medicaid long-term care eligibility requirements, and is not intended to be a replacement for professional legal consultation or to provide specific legal advice for any individual case. The figures contained herein are subject to change.
The advice of an Elder Law Attorneyshould be immediately sought if:
a. There has been any gifting during the look-back period.
b. The assets exceed Medicaid’s asset cap.
c. There is an estranged spouse.
d. There are multiple parcels of land involved.
e. There are joint owners of accounts.
f. There is difficulty in obtaining asset or income information from a third party.
g. A Qualified Income Only Trust is required.
h. There are competency issues.
i. There is any question regarding existing legal documents.
j. Power of Attorney, Health Care Surrogate or Living Will have not been previously executed by the prospective Medicaid applicant.
k. The countability of an item is unknown or whether an item will be treated as an income or an asset.
l. There has been a denial of a Medicaid application.
by David H. Jacoby, Esq.
For 50 years, you have taken care of your spouse. You have paid all of the bills. You have made sure you have every type of insurance under the sun. You have a well thought out battle plan against getting older and the challenges you and your family may face. However, have you forgotten the obvious?
With many of the families that I meet, the extraordinary effort one spouse has made for the well-being of the other spouse is clear. Unfortunately, in their zeal to protect their spouse in the event of crises, they forgot that they might not be available to implement the plan that they painstakingly established. Now I am not talking about some high tech, computerized plan in which a mathematics degree is a requirement, I am speaking of the simple things.
It may surprise you to know how many people have never written a check or paid a bill. You would be shocked as to how many people have no idea what assets they have or even where their assets are held. All too many times, this problem becomes apparent at the most inopportune time, such as when the spouse who has always handled the couples’ financial affairs becomes ill or dies. Then the remaining spouse, who is already overwhelmed by their lifelong companion’s illness or death, must deal with the stresses of attempting to handle the finances for the first time in their lives. Obviously, this is not good. In a perfect world, this would not be a problem as good-natured people in the community would pitch in and help this individual in making sound choices. However, in the real world, there are individuals who prey upon others in this situation. This is where some basic knowledge can give your spouse the power that makes the difference for you both.
Do not protect your spouse by dealing with all of your financial affairs; educate them. Educate them as to how to manage the family finances. Let them write the checks for the bills. Encourage them to provide input into investment decisions. With your guidance, you can help them avoid pitfalls that may face them in the future.
Specifically, I suggest the following:
- Maintain a list of all of your assets, including the approximate value, name, address, telephone number and account number for each asset. List the name of any individual at that organization that you have dealt with in the past.
- Maintain a list of all income sources, including address, telephone number and account numbers.
- Maintain a list of any life insurance policies, amount of death benefit, addresses, policy numbers and telephone numbers.
- Make a monthly budget and review it with your spouse. Show them how the budget would be affected by your disability or death.
- Maintain a list of health insurance and long-term care insurance policies that are in effect, with the names, addresses, policy numbers and telephone numbers associated with each. Make a summary of the policies’ benefits.
- Review your estate plan (wills, trusts, powers of attorney, living wills, etc.) with your spouse.
- Establish relationships with professionals such as a banker, investment advisor, attorney and accountant. Make sure your spouse has an opportunity to interact with these people and get to know them. Maintain a list of their names, addresses and telephone numbers.
- Write an instruction letter to your spouse of what you think should be done in the event of your illness or death.
Doing these things will not only benefit your spouse and any other member of your family who might be in charge of your affairs in the future, but will also bring matters that you may have overlooked to your attention.