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Florida Nursing Home Medicaid Spend Down Planning

When an elder needs Long-Term Care Medicaid in Florida, the government has established a number of financial qualification rules based upon the applicant's income and assets. We have a list of Florida Medicaid financial requirements on this webpage, which is updated semi-annually. The basics on Medicaid "spend-down" is that a single Medicaid applicant is only allowed $2,000 in countable assets while the community spouse (the spouse at home) is allowed to have some $123,600 in countable assets (2018). Only when the Medicaid applicant's income is below the applicable income and asset limits will he or she become eligible for Medicaid.

Countable Assets for Medicaid

Countable assets are assets that count towards the applicable limit outlined above. The list of countable assets includes:

  • All financial accounts (bank accounts, CDs, brokerage accounts, bonds, etc.)
  • Jointly held accounts (even if a co-owner is on the accounts, the asset is 100% countable to the applicant)
  • Cash value in life insurance policies (but only if the policy face value exceeds $2,500)
  • Second car under 7 years old 
  • Vacant land
  • Assets held in a revocable living trust

Non-countable Assets for Medicaid

Non-countable assets do not count towards the applicable Medicaid asset limit. Non-countable assets include:

  • Homestead property under $572,000 (2018) for a single person - unlimited for married couple
  • Any one car 
  • Second car over 7 years old (unless a collector's car)
  • Irrevocable funeral/burial policies
  • Funeral plots
  • Individual Retirement Accounts (IRAs) - in some cases
  • Personal property
  • Life insurance with face value less than $2,500 (regardless of cash value inside)
  • Burial account set aside with less than $2,500 

Medicaid Look-Back Period

When an elder is in the nursing home or just looking to apply for Medicaid, one very, very important rule is that you cannot give assets away with 5 years of a Medicaid application!  We have a great deal more on the Medicaid transfer penalty on this webpage. The key to Medicaid is that the family should not look to gift or transfer assets away in order to protect them - and we do not want to lie to the State of Florida in order to protect assets.

Appropriate Spend-Down Planning

Appropriate spend-down planning generally means legally spending money before Medicaid is applied for. An example of spend-down planning is as follows:

Sally, age 82, had a stroke and needs long-term care in the nursing home. Sally has a home worth less than $572,000, a car with an outstanding loan of $5,000, and only $10,000 in the bank (i.e., only $10,000 in countable assets). Here, the family can legally spend-down Sally's assets by paying off her car loan of $5,000 and purchasing a pre-paid, irrevocable funeral policy worth $3,000.  Sally's bank account will now have only $2,000 and she will now be eligible for long-term care Medicaid.

This is a simple example of spend-down planning but it shows the legal spending of a small amount of assets that could have been helpful to Sally and her family.

When you Need an Elder Law Attorney

We can generally say that an elder law attorney is necessary to the Medicaid application process when:

Food for Thought

Many people equate Medicaid spend-down planning with losing all of your money to the nursing home. The reality is that a good elder law attorney can help legally protect assets under most circumstances. If you or your loved one is in a nursing home, or may be in one soon, you will want to consult a good elder law attorney, no matter the situation, to review your circumstances and provide advice.

Protecting the Assets Before the 5 Year "Look-Back" Period

If you are not having health issues and want to protect assets before you get sick you may want to create an irrevocable asset protection trust. Please see our free guide to irrevocable asset protection trusts in Florida.

Medicaid Payback and the Medicaid Lien

Some people think that Medicaid planning cannot be done because the state of Florida has a lien upon assets upon death. This should not be a worry for most people!  You can learn more about the Medicaid lien at this blog post.

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