Financial Planning for Medicaid Eligibility for Nursing Home Care
Welcome. Nursing home care is expensive and can easily amount to $100,000.00 or more in a year. There are many Medicaid programs in Florida, but the one that covers nursing home care is known as the Institutional Care Program, or ICP.
It’s important to know that the ICP Medicaid program is different from other Medicaid programs and allows for middle income folks to qualify. The true benefit of Medicaid eligibility is a reduced rate for the same care, a private payor would pay if they needed nursing home care. It is not unlike any other medical insurance whereby the nursing homes contract with the state to provide the care at a reduced rate. Where a private payor would be charged a rate of $7,000 to $9,000 per month, a Medicaid recipient would get the same care for the cost on their monthly income. A Legal document known as a Qualified Income Trust, can be established to address the income requirements. There are also legal strategies to spend down assets. The strategy generally includes converting “countable” assets to “non-countable assets”. This allows eligibility without causing impoverishment, especially to a healthy spouse. The spouse who does not need ICP Medicaid is known as the “community spouse” in Medicaid jargon. The person applying for ICP benefits is known as the “institutionalized spouse”.
Essentially the laws are designed to prevent an otherwise financially well off person from “gifting their money” for the sole purpose of becoming financially eligible for ICP medicaid. To prevent this, there are transfer penalties in place. This is one reason pre-planning with the assistance of an elder law attorney is a good idea.
Some strategies include “spending down”. This strategy takes into account the preservation of assets, by using prudent spending strategies. Examples are making necessary repairs and maintenance on the home, purchasing irrevocable burial and funeral contracts, paying off a mortgage, prepaying caregivers for future contracted care of the applicant, or converting property to income-producing status.
For married couples, the strategy likely involves transferring property from jointly held to the name of the community spouse.
If the income of the institutionalized spouse is over the limit, then a qualified income trust can be created.
Although Medicaid is a federal benefit, it is state administered by the Department of Children and Family Services. Documentation of all assets and income must be furnished along with the application for benefits. It is important to collect all the documentation to be ready to furnish to DCF, on the date benefits are applied for.
Diane Zuckerman, Esquire can assist you and your loved ones with ICP Medicaid Eligibility or Pre-planning for nursing home care. Contact us.