The state of Florida is currently seeking a waiver from the Federal government that provides three months of retroactive Medicaid coverage to eligible Medicaid recipients.
Under current Medicaid law, Florida (and other states) is required to provide coverage to long-term care Medicaid applicants for up to three months prior to the month of application if the applicant met the eligibility requirements for Medicaid during these months. The retroactive benefit provides financial protection to families as they away approval for their Medicaid applications. The need for Medicaid can come very quickly, often after an elder has a fall and a three day stay in the hospital. We have more information on what happens to an elder after they go to a nursing home on our website.
In 2018, the Florida legislature passed a bill eliminating three months of retroactive Medicaid except for pregnant women and children. This change was submitted to the Federal government for approval, but as of August 10, 2018, this change has not been made. This will be a big change to the rules if the Federal government approves it, hurting both the indigent elderly and the long-term care industry alike. As an example:
In January, Mom falls at home and goes to the hospital. After a three day hospital stay, mom goes to rehabilitation in a skilled nursing home. Medicare will pay for up to 100 days in rehabilitation, but the elder rarely gets Medicare to pay for rehabilitation for this length of time. Mom gets as strong as she is going to get after 30 days. Now, she would be unsafe to go home or assisted living - she must stay in long-term nursing home care for long-term care starting February. Long-term care in the nursing home will cost her over $9,000/month and she needs to spend down some of her limited assets in order to acheive Medicaid. Mom only has $6,000 in the bank and a life insurance policy with a cash value of $8,000, so she has countable assets of some $14,000. She will be eligible for Medicaid when her assets are less than $2,000. See our list of financial eligibility for long-term care in Florida.
Current Law with Retroactive Medicaid:
Under current Medicaid law, Mom (or her family) can legally spend her money through spend-down planning. She cannot give assets away without incurring a Medicaid transfer penalty. With legal spend down, she can purchase an irrevocable pre-paid burial policy and a funeral plot, as an example. If her countable assets were more than $14,000 (i.e., this scenario), or if the family wanted to legally protect assets aside for her care, an elder law attorney can help protect her assets. Either way, mom legally spent her assets in February to less than $2,000 but a Medicaid application did not happen until April due to a family illness. Here, Mom's Medicaid will be retroeffective to February as she was eligible for Medicaid in February (again, her assets were less than $2,000 by the end of the month), even though she did not apply for Medicaid until April.
Effects of Changes without Retroeffective Medicaid:
Same facts as above but Medicaid will not be effective for February or March. Mom did not apply for Medicaid until April and even though her assets were below the applicable level of $2,000 through legal spend down. Now, she still owes the nursing home some $15,000 for her two months of stay.
Some thoughts on the proposed changes:
- With the changes, it will be vital to submit a Medicaid application as soon as possible, even if mom may or may not stay in the nursing home
- These changes will encourage people to apply for Medicaid even when they are not technically eligible
- Consulting a good elder law attorney will be necessary as soon as possible
- UMEDS will still be available to pay the nursing home for unreimbursed expenses, such as an unpaid nursing home bill. This can help the nursing home get some reimbursement for unpaid medical bills but it is not as important as 3 months of retroeffective Medicaid that we currently have.
I will update this blog post when we have an update from the Federal government.
If you or a loved one is about to enter a nursing home, or is paying the high cost of nursing home care now, a good elder law attorney can help you protect assets in the right situation.
If you want to learn more about protecting assets from the nursing home or you are currently a caregiver for a loved one, please feel free to download a free copy of my book, Protect Your Nest Egg from a Nursing Home: Your Florida Survival Guide.