Medicaid Planning for Institutional Care in Gainesville, FL

Medicaid planning is incredibly complex. But the bottom line is that there are often ways to protect your assets if you need long term care. However, there are also pitfalls that must be avoided, such as the lookback penalty. If you need help with Medicaid planning, contact an elder law attorney today.

What is the Medicaid Institutional Care Program?

The purpose of Medicaid is to to reimburse certain costs of medical treatment for needy persons. This can include paying for long-term care in a nursing home if the needy person qualifies for the Florida Institutional Care Program (ICP). Qualifying for ICP Medicaid benefits requires an individual certain requirements for maximum income and asset levels. Medicaid is intended to be “the payor of last resort,”[1] and thus qualifying for Medicaid assistance can be difficult for those with any significant financial means. And this is where an attorney gets involved to help. The attorney helps arrange a person’s assets or income so that they can qualify for ICP Medicaid benefits without losing the full benefit of their assets or income.

Qualifying for ICP Medicaid Benefits

ICP Medicaid benefits are available only to Florida residents who are either disabled or at least age 65.[2][3] In addition, applicants for ICP Medicaid benefits must be certified as meeting the criteria for nursing home care by the Comprehensive Assessment and Review for Long-Term Care Services team.[4] Finally, the applicant must meet the income and asset requirements. The applicant’s gross income cannot exceed 300 percent of the SSI federal benefit rate after consideration of allowable deductions.[5] This limit changes every year. In 2021, the monthly income limit is $2,382 for an individual and the asset limit is $2,000 for an individual. When calculating assets, the applicant should not subtract unpaid expenses.

The applicant’s spouse must also meet resource and income requirements. The spouse may have resources up to the community spouse resource allowance (“CSRA”) and income up the minimum monthly maintenance needs allowance (“MMMNA”) without jeopardizing the applicant’s benefits. In Florida in 2021, the CSRA is $130,380 and the MMMNA is $2,155. Thus, the spouse may have up to $130,380 in resources and $2,155 in monthly income without jeopardizing the applicant’s benefits.

If an individual does not qualify because of the income or asset requirements, steps can often be taken to fix this problem. For example, an applicant may be able to engage in spending down their assets or moving assets into a special needs trust.

Medicaid Payback

All states participating in Medicaid are required to institute programs to recover long-term care Medicaid expenses from the estates of deceased residents. In Florida, this estate recovery is handled by the Agency for Health Care Administration (“AHCA”). The personal representative of an estate is required to serve a copy of the notice to creditors on the AHCA, even if the personal representative is unaware of the decedent ever receiving a Medicaid benefit.[6] If the decedent received public medical assistance, then the AHCA makes a creditor claim against the estate in an amount equal to “the total amount paid to or for the benefit of the recipient for medical assistance after the recipient reached 55 years of age.”[7] The Florida Probate Code considers Medicaid claims as class 3 in order of payment behind costs of administration, compensation for fiduciaries, and funeral expenses.[8] However, in the case of a first-party disability trust and a first-party pooled trust, only taxes and reasonable fees for administration may be paid before Medicaid claims.[9]

Because the Medicaid claims are paid back through the applicant’s estate after death, it is important to understand what is meant by the word “estate.” For purposes of Medicaid payback, the estate includes “all real and personal property and other assets included within the individual's estate, as defined by the state's probate law.”[10] However, states may elect to expand the definition of estate beyond what is probatable to include “any other real and personal property and other assets in which the individual had any legal title or interest at the time of death (to the extent of such interest), including such assets conveyed to a survivor, heir, or assign of the deceased individual through joint tenancy, tenancy in common, survivorship, life estate, living trust or other arrangement.”[11]

Fortunately for survivors of deceased Medicaid beneficiaries, Florida has not expanded its definition of “estate.”[12] Thus, only what is contained within the Florida probate estate is subject to Medicaid payback, which means property passing by will or intestacy. Indeed, if a deceased individual has no probatable estate, no Medicaid claim will be filed.[13] Therefore, the applicant is free to minimize estate recovery by using non-probate asset planning, creating joint tenancies or tenancies by the entireties. The applicant is also free to invest in a protected homestead. However, the common probate avoidance tool of moving assets to a revocable trust will not avoid the reach of Medicaid claims, as all assets within a revocable trust are treated as an obligation of the estate.[14]

[1] Fla. Stat. § 409.910(1); Ark. Dep't of Health & Human Servs. v. Ahlborn, 547 U.S. 268, 291 (2006).

[2] ESS Public Assistance Policy Manual § 2040.0801.01.

[3] Fla. Stat. § 409.979(1)(a); see 42 U.S.C. § 1382c(a)(3)(A) for the definition of “disabled”; see also SSA POMS SI 00115.015.

[4] Fla. Stat. § 409.979(1)(b).

[5] Fla. Admin. Code Ann. r. 65A-1.713(1)(d)–(e); ESS Public Assistance Policy Manual § 1840.0110.

[6] Fla. Stat. § 733.2121(3)(d).

[7] Fla. Stat. § 409.9101(3).

[8] Fla. Stat. § 733.707(1)(c).

[9] SSA POMS SI 01120.203.D.8.

[10] SSA POMS SI 01120.203.B.10.

[11] 42 U.S.C. § 1396p(b)(4)(A).

[12] 42 U.S.C. § 1396p(b)(4)(B).

[13] Blechman v. Estate of Blechman, 160 So. 3d 152, 157 (Fla. 4th DCA 2015).

[14] Art. X, § 4, Fla. Const.