A Sun City Center Estate Planning Attorney Explains CSRA
Medicaid provides a critical lifeline for senior citizens who can no longer support themselves at home or without assistance. However, Medicaid is subject to strict income limitations. Although the federal government enforces so-called “Community Spouse Resource Allowances” to prevent impoverishment, many Florida couples are forced to make difficult decisions about their post-retirement income and assets.
DeLoach, Hofstra & Cavonis, P.A., can help you explore your options for receiving benefits without losing your life savings.
Florida Medicaid and Long-Term Care
Senior citizens and adults with disabilities unable to afford the costs of long-term care often plan to fall back on Medicaid. In Florida, different state initiatives—including Statewide Medicaid Managed Care, and the Long-Term Care Waiver Program—offer a wide range of services to approved applicants. Recipients are allowed to make informed decisions about their placement, and may choose to relocate to an assisted living facility or receive support from the comfort of their own home.
However, while the Florida Agency for Health Care Administration oversees the in-state disbursement of Medicaid benefits, Medicaid is still a federally-funded program subject to strict regulation and is reserved for persons of limited means. Those who apply for Medicaid who own a large retirement fund or significant savings may need to redirect income or transfer non-exempt assets to a trust as part of the qualification process.
Although Medicaid rules can be restrictive, married couples are entitled to some leeway through the Medicaid Community Spouse Resource Allowance (CSRA). It permits the non-applicant spouse to retain sufficient assets to live a more comfortable and dignified life.
Florida’s Community Spouse Resource Allowance
The federal Centers for Medicare and Medicaid Services are required by law to prevent “spousal impoverishment,” or a situation in which a healthy spouse is forced to live in poverty to ensure their partner’s treatment expenses remain covered.
The CSRA is one of several spousal impoverishment concessions. It sets a minimum and maximum “resource standard,” which permits the healthy spouse to retain non-exempt assets within a certain limit. In Florida, the CSRA limits is $154,140
Two Types of CSRA Assets
Before approving Medicaid benefits for long-term care, the state is required to review an applicant’s assets. If a married couple’s assets don’t fall within the CSRA guidelines, then the Florida Agency for Health Care Administration cannot cover the costs of care. However, the state’s review of a couple’s resources doesn’t consider every asset countable for the purposes of a CSRA determination. Instead, they’re categorized as either of the following.
Countable (Non-Exempt) Assets
A countable asset - something that is non-exempt, is typically any type of liquid asset that can be readily converted to cash, which could be used to pay toward long-term care costs. Countable assets often include savings accounts, investment portfolios, company stocks, and secondary real properties, like a vacation home. Under most circumstances, only non-exempt assets are used to determine the non-applicant spouse’s CSRA.
Non-Countable (Exempt) Assets
Exempt assets, or non-countable assets, aren’t factored into CSRA calculations. In most cases, exempt assets are considered integral to the non-applicant spouse’s comfort and quality of life. Non-countable assets may include the couple’s primary home, household furniture, a personal motor vehicle, certain types of trusts, and many life insurance policies (but not the cashe value of a life insurance policy).
Interestingly, IRAs and 401ks are non-countable assets if the applicant is taking periodic distributions from the account, such as required minimum distributions (RMDs).
Exploring Your Options for Long-Term Care
A married couple’s CSRA is typically assessed on a “snapshot date,” which may be either the recipient’s first day of long-term care or the day on which they qualify for a Medicaid waiver.
On the snapshot date, a Florida Agency for Health Care Administration representative reviews the couple’s combined assets to determine whether they meet resource standard requirements. If the total value of assets doesn’t fall within CSRA limits, then they will have to “spend down” to receive benefits. This can prove problematic, especially for couples who:
- Saved a significant amount of money for retirement (i.e, over the Community Spouse Resource Allowance)
- Receive or expect to receive distributions from an IRA or other account.
- Wish to retain assets for the sake of their family’s inheritance.
Although couples are allowed to “spend down,” they cannot simply give an early inheritance to their children or transfer assets into another account without risking substantial penalties. Instead, retirees must often take a more proactive approach to long-term care planning, making deliberate and carefully considered estate planning decisions before applying for benefits.
The Key!
If you or your loved one is facing long-term care, Medicaid can be helpful, even if the assets exceeds the CSRA. The key is knowing what the assets are and knowing that our law firm can help answer your questions in this difficult time. Please feel free to reach out and one of our team members will be glad to help!
