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medicaid planning

Medicaid 5-year lookback

Are There Exceptions to the Medicaid 5-Year Lookback Period?

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We’ve been talking a lot recently about Medicaid-eligibility rules. They can be confusing, we know. One of the most critical pieces to understand, for anyone approaching Long-Term Care Medicaid, is its 5-year lookback period examining financial eligibility. They look at everything, and it certainly can seem overwhelming. But there are exceptions.

Medicaid is a government program, so naturally you can expect a mile of paperwork informed by miles more of red tape, financial disclosures dating back years and laws that make no sense at times. (Spoiler alert: that’s why we suggest hiring a professional to guide the process.)

That paper trail tells a story. Your story. And if you need to achieve eligibility for Long-Term Care  Medicaid, it’s critical you get it right. At its core, eligibility is financial. You can’t have significant income and assets — or the state will declare you have the resources to pay for care yourself. A step further, Medicaid ensures you and your family have not artificially deflated your fiscal status within the last five years to become eligible.

But the system allows a few exceptions: meaningful expenditures, gifts, exchanges and transactions within the 5-year lookback. 

3 Exceptions to the Medicaid 5-Year Lookback

Medicaid understands aging parents, grandparents and other loved ones would distribute wealth and assets in their Golden Years that they can’t use in death. Make no mistake, we would always advise planning early to ethically and responsibly spend down/distribute assets and property. 

But there are exceptions. Some might call them loopholes. But they’re legally there for a reason, and great estate planning and life-care planning should factor these realities.

1. Married Couples with One Spouse Applying

Quite often, only one spouse applies for Medicaid. One may be in good health while the other must prepare for extra home-care services, adult day care/respite care, assisted living or full-time nursing care. The Community Spouse Resource Allowance (CSRA) allows the non-applicant spouse to retain much of the couple’s jointly owned assets.

Here in Florida, there is no penalty for interspousal transfers. The CSRA allows the non-applicant (known as a “community spouse”) to keep up to $130,380, while the applicant spouse may keep only $2,000. The thinking, easily enough, is that allowing such asset transfers (including non-residential property, stock portfolios and other investments, and cash savings) to a spouse will protect the applicant’s spouse and other dependent loved ones from having too little to cover living expenses.  

So let’s break down some hypotheticals:

  • If the couple together has $180,000 in net assets, the non-applicant spouse can keep $130,380 and the applicant may retain $2,000. The remaining $47,620 must be spent down or distributed within the rules.
  • If the applicant spouse has $360,000 in cash savings alone, (s)he can transfer only $130,380 to the non-applicant and retain $2,000 within the 5-year lookback. 
  • If the couple has just $80,000 in net assets, the non-applicant spouse may retain all $80,000.

If any funds remain to be spent down within the Medicaid lookback period to reach eligibility, they may be used on eligible long-term care costs, no matter where care occurs. For instance, it may cover in-home care delivered by a medical professional or even a spouse, relative or close friend.

2. Home Transfer

A Medicaid applicant may transfer a home to:

  • A legal spouse
  • Children under 21 years old
  • A blind and/or permanently disabled adult child
  • A sibling of the homeowner who has resided in the home for at least a year before the Medicaid applicant transitioned to a long-term care facility
  • An adult child of the applicant who has lived in the home for at least two years as a caregiver/care partner before the Medicaid applicant transitioned to a long-term care facility. (The provided care stipulation is key, as it must be reasonably proven that the son or daughter providing such care delayed the applicant need for formal long-term care.)

In each case, the property recipient would require proof of the status that would make them eligible to receive it.

3. Assets Distributed to Minor Children

Long-Term Care Medicaid applicants may have a minor child or children (under 21 years old) who live with a range of disabilities. These children would be eligible to receive asset transfers of any scale during the 5-year lookback period to benefit their own well-being. Common tactics include establishing trusts to temporarily transfer ownership of funds and assets until the beneficiaries reach adulthood.

Preparing for Medicaid in the Life Care Planning Process

Of course, the best bet is to have all financial planning and legal issues sorted out well before the lookback, if possible. The exceptions to this important eligibility rule do, however, account for unexpected illnesses and variables that should allow for transactions at any time. 

We can’t stress this enough: you need a professional to help to build a solid plan. Caregiver Support & Resources, LLC works with elder-law attorneys, and we can legally and ethically protect people’s assets to help them qualify for Medicaid and VA attendance. 

Medicaid, unlike Medicare, will cover most long-term care costs. Once we obtain Medicaid eligibility for an individual, if they remain within the Medicaid guidelines, they will have eligibility for the rest of their lives. Likewise for VA aid and attendance.

There’s no reason an elder or their spouse should live in poverty for transitioning to higher levels of care. Our clients, their families and future generations may still live in comfort and dignity.


(Editor’s Note: Caregiver Support and Resources, LLC is not a law office. Maureen Rulison is not an attorney. The information contained in this blog is not to be construed as legal counsel or advice or substituted as such in any U.S. state, territory, locale or foreign state where it can be accessed. Rather, this blog is meant only to educate elders, care partners and families as to legal processes around life care planning.)

Medicaid eligibility planning

How to Navigate Confusing Medicaid Eligibility Rules

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Step 1. Hire a professional.

I can’t stress this enough. If you’re building an estate plan, life care plan or any other plan for yourself or a loved one, Medicaid planning and asset protection should always be an important part of the discussion.

Sure, there are some who are ineligible due to Medicaid income and asset limits. We’ll talk about that later. But for nearly 60 percent of nursing home residents and 30 percent of elders/persons with disabilities, Medicaid is a godsend to cover outrageous long-term care costs. 

Hire a Professional to Help with Medicaid Eligibility

Let me introduce you to Betty. (My sincerest apologies, if you are or you know a Betty. I’m sure you’re/she’s wonderful!) But Betty’s a member of, almost certainly, any community here in the beautiful, sunny State of Florida. She tackled Medicaid planning on her own for her mother 25 years ago. She has all sorts of outrageous claims and outdated theories about the process.

Don’t listen to Betty. She’s almost always wrong. She scares good people, like yourself, into even talking to a professional, like myself, about building a Medicaid plan with asset protection.

Yes, health care companies have zero sympathy for people who cannot pay through other methods like Medicare, private insurance and/or savings. They will seize assets (after you or the loved one in question have passed on). 

No, they won’t take your income. They won’t take your house. The worst Medicaid can do is say you’re ineligible. Therefore, the goal — if Medicaid is your only route to paying for expensive long-term care — is to protect your assets by becoming eligible.

And That’s Where We Come In

OK, so you’ve heard about all these income and asset limits. They can be confusing with their different:

  • Tiers of eligibility
  • Applicant categories
  • Levels of care coverage
  • Adjusted income formulas

You can be single, married, whatever, along a range of possible incomes and assets only to learn some legal and financial realities are considered differently from others, affecting your Medicaid eligibility in Florida.

What We Do to Achieve Your Medicaid Eligibility?

Caregiver Support and Resources, LLC builds a Medicaid-eligibility plan that works. Almost every Medicaid law — a federal entitlement program administered separately by the states — has exceptions. We work with you and elder law attorneys to determine your financial and legal needs and legally and ethically protect people’s assets.

Here’s the process in a nutshell:

Building the Initial Plan

Medicaid planning can be simple — sometimes requiring only assistance with the collection and preparation of documents. It may be complicated — perhaps a complete restructuring of one’s financial assets. Sometimes qualifying for Medicaid may involve transferring assets away from the applicant within established timeframes or, if possible, changing eligible assets into non-countable assets.

Legal issues require licensed legal consultation. In our time as the Clearwater, FL area’s premier caregiver resource, we have done many Medicaid-eligibility cases alongside the law firm Peebles & Gracy, P.A. We will also work with a lawyer of your choice. 

Review By Parties

You and/or your loved one and attorney will review the written plan for accuracy and completion. We will compile all necessary legal paperwork (including, but not limited to: qualified income trust, personal services contract, and estate-planning documents like power of attorney, living wills, etc.)

Submission

Once the plan is agreed upon and deemed legal by a licensed attorney, we submit the application to the State of Florida. The client will never have to deal with state Medicaid workers or officials. As their representative — and as a Board-certified Patient Advocate — we serve as the point of contact between the state, the individual and care-partner team, attorneys, and medical facilities/resources.

Corrections

As with any government machine, Medicaid is a monolith with thousands of employees that handles millions of cases. Mistakes are made, despite their best efforts. Oversights happen. Paperwork gets lost in the cracks. 

We correct any errors by the state and give clarification on your behalf.

After Care

After approval, Caregiver Support and Resources offers an after care program to help navigate their first annual review with the state. The process can understandably be daunting and stressful, as many stress that something could go wrong to affect their Medicaid eligibility. 

Don’t fret. We’re there by your side for every step and beyond.

Professional Medicaid Eligibility Planning with a Personal Touch

Medicaid has a lot of moving parts. Don’t let yourself get lost in loads of paperwork and uncertainty. You need a professional to navigate the system and account for your legal and financial best interests. 

Education is a huge component of what we do. Medicaid eligibility is often complex (and maintaining eligibility may be, as well). We educate the client on processes and financial realities that could help (or hinder) your eligibility. I always say, “I have a limit of 5 million questions. It’s far better to ask than to allow an important factor to be overlooked.” 

For a flat rate, we go to bat for you, saving you time and expense juggling many tasks and consulting with Medicaid-qualified legal experts along the way. We don’t just offer instructions. We’re hand-holders. We’ll go to the banks, make the calls, compile your paperwork and ensure it’s filed correctly, avoiding silly mistakes and confusion.

There’s no reason anyone should live in poverty for transitioning to higher levels of care. Our clients, their families and future generations may still live in comfort and dignity.

(Editor’s Note: Caregiver Support and Resources, LLC is not a law office. Maureen Rulison is not an attorney. The information contained in this blog is not to be construed as legal counsel or advice or substituted as such in any U.S. state, territory, locale or foreign state where it can be accessed. Rather, this blog is meant only to educate elders, care partners and families as to legal processes around life care planning.) 

Medicaid and VA planning

Protect Your Assets with Medicaid and VA Planning in Florida

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You and/or your loved one wish to grow old without financial worry. OK, right off the bat, let’s rephrase that. You and/or your loved one wish to cover any necessary medical needs without surrendering your hard-earned money and assets for yourselves and future generations. This is where Medicaid and VA Planning must be an essential part of any well-made life-care plan.

Wise choice. Whether you’re seeking such services here in Florida — or any other U.S. state or territory — the astronomical costs of health care can drain bank accounts more quickly than you imagine. 

How Much Could Nursing Home Care Cost Without Medicaid and VA Planning?

Did you know that Medicare and most other insurances don’t cover a stay in a Florida nursing home beyond 100 days? So costs could come out of pocket, from savings, or from property or other financial assets for a longer-term stay due to illness or even a moderate injury from an unexpected fall. 

So let’s have a look at some average long-term nursing facility costs, according to the Genworth Cost of Care Survey. In 2020, a semi-private nursing home room in Florida cost $8,669 PER MONTH! The United States average was $7,756 per month. Not that they were much cheaper, but our neighbors in Alabama and Georgia paid $6,540 and $6,722 monthly, respectively, for equivalent nursing home rooms, according to those most recent statistics.

But let’s analyze the numbers even more deeply, city by city and region by region. Here in the Tampa Bay, FL area, an average semi-private room in 2020 cost $9,946 per month. Meanwhile, a four-hour drive south in Miami, FL, it was $9,095 per month and far north on the Panhandle in Tallahassee, FL it was much less costly at $7,543. (Again, we say “much less costly” recognizing how outlandishly expensive a legitimate stay in a nursing facility can be.)

And make no mistake, if you haven’t the Medicaid or VA eligibility or an actual fortune in savings to cover the cost in cash, the health system has zero sympathy. THEY WILL TARGET ASSETS.

But Medicaid and VA Planning Isn’t Only for Nursing Care

Most are typically concerned about eligibility for long-term and end-of-life care mentioned above. But some more routine types of care and assistance typically covered earlier in life for healthier individuals can still be astronomically expensive. 

These might include:

  • Homemaker services
  • Adult day care/respite care
  • Home health care
  • Assisted living facilities

Let’s again break down some Florida averages (also dependent upon specific location). A home health aide in 2020 cost $4,290 monthly. Adult day care (some may know this as respite care, a type of community care common for persons living with dementia and others who can no longer safely stay home alone) cost $1,408 per month. Homemaker services and assisted-living facilities cost $4,195 and $3,700, respectively.

Again, they will target assets, if you are not prepared financially or eligible for Medicaid or VA benefits and attendance.

Navigating Eligibility for Medicaid and VA Planning in Florida

Good news is, many individuals and couples could be eligible for Medicaid or VA assistance to protect net worth and assets with some planning. It’s actually one of the most critical elements to life-care plans I build every day. Financial eligibility planning is just as important as figuring out final wishes for end-of-life care (like power of attorney, living wills, and hospice or palliative care) or preparing for everything else (the good and bad) that goes along with our loved ones’ golden years.

Medicaid and VA coverage is primarily a financial tool — fair or unfair — that first determines if an individual or couple is financially able to cover all or some of necessary health costs. Applying people and households must come in under certain income and asset limits. 

But in general, legal Florida residents (we’ll discuss citizenship and legal residency rules, as well) seeking long-term care Medicaid must meet income limits. For Floridians to be eligible for Medicaid, they must be a Florida resident, a U.S. citizen, a permanent resident or a legal alien and require a nursing home level of care. Applicants for Long-Term Care Medicaid must also meet the state’s income limits, which in 2021 is approximately $2,382 per month for a single household and an asset limit of $2,000.

Are You Financially Ready for a the Life-Care Planning Process?

Medicaid planning legally protects an individual’s assets to care for you and yours, in addition to Medicaid and VA benefits. Caregiver Support & Resources, LLC works with elder-law attorneys, and we can legally and ethically protect people’s assets to help them qualify for Medicaid and VA attendance.  Medicaid, unlike Medicare, will cover most long-term care costs. Once we obtain Medicaid eligibility for an individual, if they remain within the Medicaid guidelines, they will have eligibility for the rest of their lives. Likewise for VA aid and attendance.

There’s no reason an elder or their spouse should live in poverty for transitioning to higher levels of care. Our clients, their families and future generations may still live in comfort and dignity.