After I gave my talk at the Fourth Annual Caregiver's Conference in Seminole on Friday, I was approached by a fellow who asked about Medicaid payback in Florida. His basic statement to me was that "most people do not know that Medicaid [for the elder] is only a loan to pay for long-term care, not a gift." His basic point was that if the elder is on Medicaid, any leftover assets the decedent owned upon death is subject to a lien by the state of Florida. This is commonly known as the Medicaid "pay back" or reimbursement provisions, and many people are unaware of this provision in the law.
My answer to him was that he was correct - Florida Medicaid does have a pay back provision, just like all states. During your lifetime, if you receive Medicaid benefits, if you die after age 55, the State of Florida is a creditor in your estate. The state has a claim in the amount of funds expended for your benefit during your lifetime, which can definitely become a great deal of money if you spend time in long-term care. I told him this was generally not much of an issue in most situations.
First, if the Medicaid applicant was single, he or she was only allowed to have less than $2,000 in countable assets in order to be on Medicaid. This means that the applicant likely has nothing for Medicaid to make a claim against upon the applicant's death. A single applicant is already impoverished and has generally nothing for the state of Florida to take.
Next, even if the decedent owned a homestead property, this property is not subject to creditor's claims (including the state of Florida!) in most circumstances. I have more on Medicaid and homestead property here. There are exceptions to this rule though, such as:
- The decedent's property lost its homestead status before death (maybe by renting the home, for instance)
- Not all homestead properties are equal. If the property is a co-operative share, such as in a mobile home park, this does not get statutory protection for Florida homestead purposes.
- The decedent's last will and testament called for the sale of the decedent's home.
Ok, so the Medicaid lien is not an issue in most circumstances. So where would a Medicaid lien take place? We can think about a few circumstances there the lien could/would be applicable:
- The decedent sold their home and went off of Medicaid before death (i.e., the applicant went on private pay)
- The decedent received an inheritance - either before they died or after, which could then be subject to the lien
- The decedent did not disclose or discover all known assets as part of the application process and the assets had to be probated upon death
- The decedent's spouse died first and left money to the Medicaid applicant, who then dies
One big point to be made is that good estate planning can avoid any potential Medicaid lien, regardless. That is one reason to see a good elder law attorney and to make sure the family creates a good estate plan, with a great durable power of attorney, to help avoid any probate or creditor problems upon the elder's death.
In summation, the Medicaid lien is not a worry for most Medicaid applicants if you have a good elder law attorney. This also means that good asset protection planning can protect assets during your lifetime and upon your death.
Want to Learn More about Medicaid and Long-Term Care?
Please feel free to download a copy of my book, Don't Lose Your Nest Egg to a Florida Nursing Home. This book will help when you and your family are dealing with long-term care for your loved one, dealing with Medicaid, Medicare, nursing homes, getting care at home and more.
If you read this, you may also want to read:
- My elder just went to the nursing home - what will happen next?
- How can Medicaid help pay for my long-term care?