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Medicaid is a federal program administered by the states. The Department of Children and Families (DCF) determines Medicaid eligible for the aged or disabled individuals not currently receiving Supplemental Security Income (SSI) in Florida.

Medicaid Requirements:

  1. Resident of the U.S. or an alien lawfully admitted for permanent residence;
  2. A state resident;
  3. Sixty-five (65) years of age or older if applying simply based on age;
  4. Blind or disabled; and
  5. Satisfy the means-based test.

For example, you are considered disabled for purposes of the Medicaid program if you are “unable to engage in any substantial gainful activity by reason of a medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months (or, in the case of a child under the age of 18, if he/she suffers from any medically determinable physical or mental impairment of comparable severity).”[i] You automatically qualify for Medicaid if the Social Security Administration has considered you disabled (i.e., you are receiving SSDI).

For purposes of the means-based test, there is both a resource test and income test. Under the resource test, an individual applicant is limited to $2,000.00 and a married couple $3,000.00 when both apply for benefits. In determining “countable resources” (i.e., assets that can be used to fund care and that are not otherwise exempt), the test is whether that asset is “available.” The simplest example of an available asset would be a checking account. Any funds in a “or” joint account (e.g., John Doe or Jane Doe) are counted 100%. Any funds in a “and” joint account (e.g., John Doe and Jane Doe), are counted pro-rata.

Non-countable resources include:

  1. Home, subject to an equity cap, if occupied by the Medicaid applicant or the community spouse;
    • In Florida, the Homestead may protect the home from creditor claims including the State of Florida.
  2. One automobile;
  3. Personal effects and household goods;
  4. Life insurance with a face value of $1,500 or less, or term insurance regardless of its value;
  5. Certain income-producing property;
  6. Retirement accounts; and
    • Florida will exempt a retirement account from the resources test to the extent the applicant is taking regular distributions from that account. However, the distribution will count towards the income test.
  7. An asset that is not accessible to an individual through no fault of their own.
    • For example, in irrevocable trust or property in probate. Note: once the asset becomes available it then may be a countable asset (e.g., cash received through an inheritance) which may disqualify the person from Medicaid.

Florida is an income cap state. This means that a resident is not eligible for Medicaid if the resident’s income exceeds $2,349 a month (2020 amount) unless the excess is paid into a special trust (i.e., a “Miller Trust” or “Qualified Income Trust”). All income, both earned and unearned, and whether paid in cash or in-kind, that is available to provide for food or shelter is included for purposes of the income test.

Penalty Period

If you transfer an asset for less than its fair market value (FMV) at any time during the 60-month lookback period there is a potential loss of Medicaid benefits. The penalty period is calculated by dividing the uncompensated amount of the asset transferred (e.g., sell an asset for $75 when it is worth $100, the numerator is $25) by the state-wide monthly average for a semi-private room for a Medicaid certified nursing facility. Certain transfers are exempt from the penalty (e.g., a home transferred to your spouse).

Estate Recovery

In 2005 with the passage of the Deficit Reduction Act, Congress “encouraged” states to seek a recovery of the Medicaid benefits paid. Florida generally only looks at assets that go through probate to be subject to estate recovery. If the judge declares the that residence of the deceased Medicaid applicant was his or her homestead, then the state of Florida should not be able to place a lien on the homestead property.

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Given the complexities surrounding the Medicaid program, we encourage you to contact our office today for a free no-obligation initial consultation.

[i] N.J.A.C. 10:71-3.12(a).

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