A PRIMER ON MEDICAID ELIGIBILITY
The following information is relevant to the Institutionalized Care Program for Medicaid (ICP). In the State of Florida, this program is managed by Department of Children and Families (DCAF). Medicaid is a joint federal/state program that helps pay for medical services for needy and low income persons. Services are provided by participating nursing homes that are reimbursed according to state formulas. Medicaid should not be confused with Medicare, which is a health insurance program run by the federal government to pay for hospital or other medical services for aged and disabled persons. The following is a summary of the ICP Medicaid rules.
Medical Requirements: The applicant must be in a nursing home or must have medical needs requiring nursing home placement. This determination is made at the time of the Medicaid application by a team of health care professionals at DCAF called the CARES team. The applicant must also be a citizen or resident alien of the United States.
Income Requirements for the Applicant: The income requirement states that the applicant's gross monthly income cannot exceed a certain figure. The 2007 figure has been set at $1,869.00. The income requirement is determined by DCAF and changes each January.
1n October 1993, a federal law became effective which allowed applicants over the state specified cap of $1,869.00 to establish an Irrevocable Medicaid Income Only Trust, and therefore, to become eligible for Medicaid. The Irrevocable Medicaid Income Only Trust must be composed solely of the income of the applicant and there are many other requirements to be complied with. This trust cannot be used with Hospice patients.
Income Requirements for the Well Spouse: There is no limit on the amount of well spouse income. In 2007, if the well spouse's gross monthly income is less than $1,712.00, then a portion of the applicant's income is given to the well spouse. This allowance consists of two portions: (1) the amount needed to bring the well spouse's income to $1712.00; and (2) the amount needed to pay for extraordinary monthly expenses such as a mortgage, above a $514.00 standard disallowance. The exact amount that the well spouse will receive will be determined at the DCAF meeting. Please keep in mind that gross amounts of income are used in all situations.
Asset Requirements for the Applicant: The asset requirements for Medicaid eligibility provide that the applicant cannot own countable assets in excess of $2,000.00, in addition to exempt and non-available assets. Therefore, it is imperative that the only asset that the applicant own is a checking account jointly held with the well spouse (and if possible another member of the family) to use to deposit the applicant's monthly income. All other assets of the applicant should be transferred to the well spouse immediately. The transfer of assets between spouses does not create any type of disqualification.
Asset Requirements for the Well Spouse: The asset requirements for Medicaid eligibility state that the well spouse can retain $101,640.00 (2007) in assets plus the exempt, non-available, and income producing assets. Exempt assets are those which a person is allowed to own and their value is not counted in determining Medicaid eligibility. Non-available assets are those which are not counted because the applicant or the well spouse has no means of accessing that particular asset, therefore, it is non-available. Assets that produce monthly income are counted as income, not assets, and are also non-available. If assets do not fall into one of these categories, then they are considered countable. All countable assets are counted at their fair market value in determining Medicaid eligibility.
Exempt Assets:
1) Homestead. The homestead of the applicant or the well spouse is considered exempt as long as the well spouse continues to reside in the homestead or the applicant intends to return to the homestead. The intent to return does not have to be based on true ability to return. DCAF personnel are not allowed to request further information once it has been stated that the well spouse lives in the homestead, or if the well spouse predeceases the applicant, that the applicant intends to return to the homestead. Currently in Florida, the DCAF lien does not attach to the homestead if the homestead will pass to the children of the owner at the time of the owner's death. There is currently a move to change this rule and the homestead may be subject to the DCAF lien in the future.
2) Motor Vehicle. One motor vehicle, regardless of age or value. A second motor vehicle over seven (7) years of age.
3) Property. Personal property is exempt so long as it does not include valuable art or jewelry.
4) Life Insurance Owned by the Applicant. Life insurance owned by the applicant with a total cash surrender value of less than $2,500.00. Term life insurance policies may be kept because they have no cash surrender value.
5) Life Insurance Owned by the Well Spouse. Life insurance owned by the well spouse with a total cash surrender value of less than $2,500.00. Term life insurance policies may be kept because they have no cash surrender value.
6) Burial Plan for the Applicant. A burial plan up to $2,500.00 for the applicant or an irrevocable burial plan for the applicant in any amount.
7) Burial Plan for the Well Spouse. A burial plan up to $2,500.00 for the well spouse or an irrevocable burial plan for the well spouse in any amount.
8) Income Producing Assets. Assets that are producing a fair market income are not counted as assets, but only as income. The DCAF lien will attach to these assets at the death of the applicant, if they were in the applicant's name only.
The above has been presented as an introduction only to Medicaid eligibility, and as such does not account for individual circumstances which will affect eligibility. This presentation is not legal advice, nor should it been used as such. Seek advice from an attorney that concentrates his or her practice in elder law and is experienced in Medicaid matters. Such attorneys are members of the National Academy of Elder Law Attorneys and members of Elder Law Section of the Florida Bar.
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