Medicaid is a special program, funded by both Florida and the federal government, that helps low income individuals and families afford health care coverage. Medicaid is comprised of a variety of sub-programs. Our office handles Medicaid benefits for seniors who need help with long term costs, including assisted living facility and nursing home costs.

The Agency for Healthcare Administration administers this service. Two different Florida agencies determine people’s eligibility for Medicaid. The Department of Elder Affairs determines whether you are sick enough to qualify. The Department of Children and Families determines your financial eligibility.

This guide will discuss some of the critical basics about Medicaid and include links for further reading. We will go over the qualification process and discuss the nuts and bolts of Medicaid planning as well as review common fees, costs and obstacles. By the end of this guide, you should have a much clearer understanding of your options.

Background

You probably don’t need to be reminded that health care in Florida (and in America in general) can be expensive. As people age, the costs of their health care can increase even further. Ideally, the Affordable Care Act would ensure that all American citizens, including seniors, would have affordable health insurance, enabling even low-income citizens to get proper healthcare without resorting to hospital emergency rooms.

However, insurance sometimes does not cover all health care costs, and/or coverage may be too expensive to afford. Many seniors, for instance, end up living in a nursing home; either they or their children must come up with the funds to pay for the nursing home monthly payments.

Here are four common options people use to pay for health care:

1. Savings

If you’ve managed your money wisely, you may have enough to cover nursing home costs or expensive surgeries. However, few people want to cannibalize their hard-won savings to pay for health care costs, and the money can go quickly, especially if hospitalization is needed.

2. Medicare

This governmental health-care program offers benefits to seniors over the age of 65. The program can pay for a skilled nurse to provide care for a senior at home for up to 100 days, but it won’t provide benefits for custodial care or full-service nursing home care.

3. Private insurance, including Long Term Care Insurance

Insurance can pay for long hospital stays and other extended care costs. However, the price of insurance can be high, and policies may have numerous exclusions. Just because you have coverage doesn’t mean you’ll be able to collect money to cover your needs. Insurance companies can fight (and sometimes refuse to pay) even reasonable, fair claims.

4. Medicaid

Medicaid is a potentially excellent option for seniors and others who need nursing home care and other types of long term assistance. Medicaid, for instance, runs a program specifically designed to help pay for extended care in a medical facility. The Institutional Care Program (ICP) allows nursing home residents to pay for health care and stays in nursing facilities.

Applying for and Qualifying for Medicaid

You can apply for benefits right over the internet at http://www.myflorida.com/accessflorida

If you’re applying for family-related Medicaid through DCF, you can expect an answer about your benefits within 30 days, once DCF has verified your eligibility. Depending on circumstances, you may be eligible for what’s known as retroactive Medicaid, which gives you up to three months of aid, retroactively given from the date of your application.

You must:

  • Be a United States citizen or qualifying non-citizen
  • Be a resident of Florida
  • Have a Social Security Number
  • Provide a reasonable explanation and/or documentation of your needs
  • File for all benefits that you might be entitled to receive. These could include Medicare, Social Security or pensions.

You’ll need to provide information about your assets and income, including your bank accounts, property, vehicles, funds, wages and Social Security benefits. You also need to keep DCF apprised of significant changes in your life, such as a pregnancy or new job (or job termination).

This sheet contains more specific eligibility requirements for different groups.

If you’re applying for Medicaid’s Institutional Care Program (ICP), you will need to go through a different process. ICP covers seniors who need to receive care at nursing homes or at other long-term care facilities. In most cases, the individual must be at least 65 years old, a U.S. citizen, and a Florida resident with a Social Security Number. The senior must also need nursing facility services. The applicant must also file for other benefits he or she can receive, note other medical coverage, and demonstrate financial need.

If you’re applying for Medicaid’s Home and Community Based Services Program (HCBS), it’s still a different process. HCBS pays for Assisted Living Facilities and care at home. But the benefits are very limited—about $1,200 a month.

You must first enroll in a wait list, and only when the government decides, you can be out of the wait list and apply for Medicaid. That wait list may take two months or years. Priority is given to seniors who are in the most critical conditions. 

To determine whether you meet the threshold for financial need, the government will scrutinize your finances. An individual applying for Medicaid ICP has an asset limit of $2,000, although his or her spouse may have assets (that amount changes every year—as of 2019, it’s $126,420). If both spouses need Medicaid, the limit is $3,000. However, certain assets are not calculated into the limitations, allowing homeowners (and others) to retain wealth while still qualifying to receive Medicaid. Some of these assets include: a home, a vehicle (of any value), burial funds and contracts, and life insurance, as long as the policies are not more than $2,500 for any insured party

Many other exclusions can apply; these can be found in official Medicaid ICP information. In addition to setting a limit on assets, ICP qualifications also set a limit on income. Any income that an individual receives must be less than a gross figure a month and must be updated every year (the minimum gross income is $2,313 for 2019—an amount that gets adjusted every year). If an individual's income exceeds the limit, he or she will need to set up a qualified income trust (commonly known as the “Miller Trust”) to qualify for ICP.

The Medicaid Planning Process: What It Is; Why You Need to Do It

When you’re sick and struggling financially, the last thing you probably want to do is to sit down with your budget and your big picture goals, crunch numbers, gather and review lots of documents about your health care needs and income, and create a detailed plan about how to proceed. Unfortunately, this understandably intimidating “to do” list deters many families from engaging in the planning they need to do to maximize their Medicaid benefits.

Without effective planning, you could accidentally torpedo your personal finances, wind up not qualifying for fair benefits, and face long term care costs unprepared. The consequences can be grave and far ranging:

  • If you fail to qualify for Medicaid, your children or other relatives may feel obligated to pitch in, creating a ripple of financial stress that could impact many people you love.
  • Poor planning could lead to the revocation of your benefits when you need them most.
  • You could end up losing critical assets that you’ve spent a lifetime accumulating – e.g. retirement funds, a home you built with your own hands, etc. – that you could protect or at least keep in your family if you planned better.
  • You may wind up getting substandard medical care, which can obviously impact both your health and your quality of life as you get older.

For instance, let’s say a senior fails to plan ahead and suddenly needs nursing home care. Any assets that person transferred within the past five years will be subject to the Medicaid penalty, if the senior applies for ICP care. This penalty will vary based on the circumstances, but it could lead to many months of lost benefits – thousands and thousands of dollars lost.

The bottom line: you only have limited control over the timing and costs of healthcare needs. You must prepare for all eventualities to take advantage of the Medicaid laws and benefits.

Former President Dwight Eisenhower once famously noted that “plans are useless, but planning is indispensable.” That sounds paradoxical, but it’s really a deep insight into the nature of the human struggle to obtain order. Once your plans engage with the real world, you can expect them to be rendered useless or nearly useless relatively quickly. You can’t anticipate anything – especially when it comes to health issues – so you will be surprised (perhaps in a good way, perhaps in a bad way) by what happens. But what the act of planning does is to give you the tools and knowledge to improvise effectively, once your initial plans falter. You become much more nimble and better able to cope, when you have a solid plan in place.

Pre-Planning

Assuming you are reading this article for insight into a health care issue that’s not yet blossomed into a crisis–you can see it on the horizon, but it hasn’t overtaken you yet–you probably can draw from a range of tactical and strategic options to manage your money and ensure your health and your family’s well being.

You may be able to rearrange your assets and income to minimize the likelihood of Medicaid penalties. Or you might be able to purchase long term care and/or disability insurance to meet certain contingencies. Or you can relocate your family (or a sick family member or senior) to reduce the burden on everyone involved.

Seniors, for instance, have the ability to set up trusts, draft living wills, give monetary gifts, and set up estate plans before applying for Medicaid and qualifying to receive ICP care. Money set aside in trust funds as well as assets properly gifted to children are not subject to the Medicaid ICP qualifications, and they will have no bearing on the ICP application's acceptance. Seniors must make sure their planning is done long in advance, however. If financial gifts are given within five years of the ICP application, the applicant may face penalties from Medicaid Law.

This isn’t to say that you’ll be able to come up with solutions for everything. You may, for instance, abhor the idea of going into a nursing home. But your financial reality may dictate that you really don’t have any choice. The key is to identify possible palatable solutions as early as possible in the process, so that you can make choices that truly appeal to you.

(Some families consider nursing home care a “last resort,” but the truth is that professional nursing facilities can often provide more constant and higher quality care than most seniors will be able to obtain either living on their own or living with their children.)

Crisis Planning

You may have grabbed a copy of this guide in a quest to get a handle on a major family emergency. For instance, maybe you just discovered signs that your father has developed dementia, and you need to get him into a nursing home or other facility ASAP.

Dealing with a health care crisis is no small task, even if you’re not the one who’s sick. One key to getting through the process is finding appropriate support. Take the time to find and solicit services from excellent doctors and financial advisors, and connect with a knowledgeable Florida Medicaid attorney to help you navigate your challenges.

What to Expect

The Medicaid process, unfortunately, tends to be expensive and complicated. Navigating the bureaucracy is not simple, and it takes work to ensure that you meet all your filing deadlines and handle all the paperwork effectively and efficiently.

The Benefits of Hiring a Qualified Team

Even if your health and financial circumstances appear relatively straightforward, planning for Medicaid can be a complex endeavor, requiring a comprehensive knowledge of Medicaid laws and rigorous follow through to prevent penalties, taxes or delays.

If an individual overlooks a Medicaid law in planning finances and moving assets, he or she may face penalties or rejection of a Medicaid application. In an effort to avoid incurring legal fees, many people mistakenly hire financial advisors and consultants to help them move assets, make financial gifts, and assist with filling out Medicaid applications. The pitch usually goes something like this: the financial advisor or consultant offers the senior a financial product, such as an annuity, that allegedly will maximize gains and help clients qualify for Medicaid. On paper, the product sounds wonderful. In practice, not so much! In most cases, the annuity does not qualify as an exempt asset; therefore, seniors who buy it wind up being disqualified for Medicaid, and they face a penalty for purchasing the annuity. 

To reiterate, be very wary when financial advisors and consultants pitch you financial products to help you qualify for Medicaid. These products can do way more harm than good, and you can even be disqualified from getting the money you need for critical care.

Differences Between What a Lawyer and a Financial Advisor Can Offer You

Financial advisors are not qualified to give legal advice regarding Medicaid law. If they do give legal advice, they are overstepping their rights – and in some states, committing a misdemeanor. In Florida, the unlicensed practice of law is a third degree felony. Recently, the Florida Supreme Court issued an advisory opinion finding that non-attorneys providing any legal advice in connection with a Medicaid application and preparing legal documents in connection with a Medicaid application engage in the Unlicensed Practice of Law, therefore subjecting them to civil and criminal penalties. 

Although elder law attorneys cannot offer the same quality of advice on how to move money for financial gain, they can offer better insight regarding how to manage assets to create the least amount of concern on a Medicaid application and can also put a team together to accomplish the financial goals associated with the Medicaid planning. In addition, an experienced lawyer can help you handle any legal issues or disagreements that may arise regarding the movement of assets prior to the submission of a Medicaid application.

When a client fills out the Medicaid application, he or she may need to address legal issues raised by some of the questions on the application that a trained, experienced Medicaid attorney can help answer. Attorneys must adhere to ethical rules and regulations set by the Florida Bar, which also establish penalties for violations of these rules and regulations.

This formal structure incentivizes attorneys to provide excellent legal advice and to take extra care when interpreting Medicaid law as it applies to the client’s long-term healthcare and financial situation.

Planning for your Medicaid application requires both legal and financial knowledge, so you may want to retain both a financial advisor and attorney. To guarantee the security and privacy of your finances, confirm that your relationships with both professional parties are protected by confidentiality rules. Attorneys must provide this confidentiality by law, while financial advisors are not bound by the same instructions. Make sure you trust your financial advisor.

How to Choose the Right Attorney for Your Medicaid Planning and Application

Lawyers are trained to read and interpret very detailed and difficult legal documents and to advise their clients on the most appropriate steps to take, based on their findings. Many lawyers can interpret Medicaid laws and translate them into layman's terms, but only an experienced Medicaid attorney can help you understand and deal with all the diverse issues created by your case. When interviewing prospective elder law attorneys, consider the following factors:

Credentials

Some lawyers consider themselves to be competent in multiple areas of law, and they may work in several different capacities. Ideally, you want to work with an attorney who spends a substantial amount of time helping clients with elder law cases, specifically, and who has handled other Medicaid matters. Your attorney should be a member in good standing of the Florida Bar. Check for other affiliations that the attorney has with national groups or local organizations focused on elder law.  Ideally, your attorney should be a Florida Bar Board Certified Specialist in Elder Law.

Experience

While a young lawyer may be very smart and knowledgeable with respect to Medicaid law, he or she may lack the practical experience necessary to connect with and understand a client's needs and to advocate aggressively for the client’s behalf in the system.

Part of Medicaid planning involves empathizing with the client, so good listening skills are also crucial. The attorney will also need to have a sharp strategic sense, informed by practice, regarding how to move assets in a way that will not arouse suspicion or concern when you submit the application. You need to ensure that every financial move is legal and cannot be faulted by Medicaid law in any way.

References

Take the time to look at online reviews for lawyers you considering hiring. While these evaluations may not perfectly reflect the attorney's abilities, they can give potential clients an idea of the quality of service to expect. Don't be afraid to pay well for high quality representation. Many clients make the mistake of being “penny-wise, pound-foolish” when they plan for elder care needs. A qualified attorney, who understands how to navigate the complexities of the Medicaid system, can help clients and their families not only save substantially on elder care costs and protect treasured assets but can also act as a guide throughout the process, providing clarity and peace of mind during challenging transitions and times of medical and financial emergency.