Palm Beach Medicaid Planning Attorney
I am Florida Medicaid planning lawyer Lee A. Rosenthal. The information below is intended to serve as general information about Medicaid and Medicaid planning. Call or e-mail my law firm to discuss your goals. I offer a free initial consultation to discuss your needs.
The Differences Between Medicare and Medicaid
Medicare is health insurance provided by the federal government. Everyone is eligible to receive Medicare. Medicaid is catastrophic illness insurance. Not everyone qualifies for Medicaid coverage. Medicaid is a joint state-federal program that provides health insurance coverage to low-income children, seniors and people with disabilities. In addition, Medicaid covers care in a nursing home for those who qualify. Medicaid is the default nursing home insurance of the middle class.
Basic Medicaid Rules: Eligibility
In Florida, eligibility for Medicaid benefits depends on two types of criteria: The Level of Care requirement, and the level of assets an applicant owns.
The Level of Care Requirement: A Medicaid applicant must show they are in need of the level of care and placement for which Medicaid benefits are sought. A determination will be made by the Department of Elder Affairs Comprehensive Assessment and Review for Long Term Care Services Team (CARES) consisting of a registered nurse and/or social worker. The CARES team looks at an applicant's activities of daily living. Generally, the CARES team considers whether a patient cannot perform three of the five Activities of Daily Living (ADL). These activities are:
- Walking and standing (transferring oneself)
- Clothing oneself
- Feeding oneself
- Bathing oneself
- Doing toiletry oneself
The Asset Test: In order to complete this test, one must determine the available assets and subtract any exempt assets and protected resources. The remaining balance is what is known as the spend down amount. Available assets can include real estate, automobiles, bank accounts, cash, retirement plans, life insurance and your personal property.
Once you have determined all available assets, you must determine which of your assets are exempt. Exempt assets will not be included when determining the number of "countable" assets to see if you are eligible for Medicaid. Exempt assets include your home, and one automobile, regardless of value. If you have a community spouse, all of your personal property is exempt. If you are not married, up to $2,000 in personal property is exempt. Other exempt assets include prepaid burial contracts, burial funds, burial plots, life insurance and an income stream. Examples of an income stream include properly structured annuities, income producing real estate and income from non-negotiable loans. Medicaid requires that you are named as a beneficiary to an annuity second only to your spouse.
Calculating the Spend Down
Here are the rules in 2010. If you are single, you have $2,000 in protected resources. If you have a spouse at home, you have up to $109,560 in protected resources, and $2,000 in assets. In terms of income, if you are single, you are allotted $2,022 per month in income. If you are married, there is no maximum for a well spouse. There is a $35 maximum for an institutionalized spouse.
Qualifying for Medicaid if You Make Too Much Money
One device that can help you qualify for Medicaid is a qualified income trust, or QIT. A QIT is a device by which an applicant's income may be deemed not to exceed the income cap. This is accomplished by placing any income over the income cap into a special, irrevocable trust.
Qualified Income Trust
A Qualified Income Trust may be created by a Medicaid applicant when the applicant's income exceeds the Medicaid limit. The current limit for income in 2010 is $2,022 per month.
The income trust must be irrevocable and must provide that all income, in excess of the Medicaid cap, be paid by the trustee for the personal needs of the applicant ($35), the community spouse's approved monthly allowance, or the nursing home expenses.
If the applicant cannot execute the trust, either the attorney-in-fact may execute the qualified income trust, or a court may approve a qualified income trust.
This office has the expertise and experience to draft a qualified income trust to help you qualify, in short order, for Medicaid benefits.
Qualifying for Medicaid if You Have Too Much In Assets
If an applicant has too much in assets (over $2,000 in "countable" assets) then steps must be taken to reduce those countable assets, such as a Personal Services Agreement, a Pooled Trust, or interspousal transfers.
Personal Services Contracts
The Medicaid applicant may place assets into a personal service contract with another party and that party could be a family member, who would be obligated to perform a list of personal services for the applicant over a period of time, up to the lifetime of the applicant.
The services can include a wide variety of tasks, such as monitoring the health of an applicant while he or she is at an assisted living facility or nursing facility. Services can also include supervising and procuring various activities such as hair appointments, additional therapy, and various activities beneficial to the applicant.
Once the list of services is stated and the hourly pay is agreed upon, generally the personal service contract specifies services to be rendered up to the lifetime of the patient. The applicant's lifetime is computed by referring to the Social Security Actuarial Tables, which list the expected lifetime of a person by age and by gender. The personal services agreement merely computes the number of hours per year and multiplies that by the number of expected lifetime years to arrive at a lump sum total, which is then transferred over to the provider of services.
The hourly fees for the work done should be substantially below the customary rate charged by professionals for the same work. Documentation of professional rates should be provided to Medicaid.
In 2010, Medicaid, at least in Palm Beach County, has insisted that documentation for the services provided be submitted to Medicaid. This office has devised documentation in a spread sheet form, and that form has been accepted by Medicaid as a viable format for documenting services rendered. The personal services contract allows large sums of money to be transferred to providers so that the assets may be used for the benefit of the applicant as opposed to being spent down and wasted.
The Transfer Penalty:
The other major rule for Medicaid eligibility is the penalty for transferring assets. If either the Medicaid applicant or spouse transfers assets, there will be an ineligibility period for Medicaid computed by dividing the amount of the transfer for less the value by $5,000.00. The resulting quotient is the number of months of ineligibility. The look back period for uncompensated transfers is currently 60 months.
Contact Lee A. Rosenthal, Attorney and Counselor at Law • 561-799-5290
If you wish to discuss Medicaid planning or any elder law issue, call or e-mail my law firm. I offer a free initial consultation to discuss your situation.
