Florida Medicaid & Long Term Planning For Seniors
What is Medicaid?
Medicaid was created in 1965 as part of the Social Security Act. It is a federal and state program designed to cover the costs of medical care, including medical bills and drug costs, and long-term nursing care. To be eligible, you must be 65 or older (if under 65, disabled or blind), a U.S. citizen or qualified non-citizen, and be medically needy (need the assistance of another in order to perform activities of daily living (ADLs). There are income and asset eligibility criteria that must also be met in order to qualify. Florida is one of a minority of states that impose an income cap. The Medicaid applicant's monthly income cap for 2024 is $2,829.00. If a husband and wife are in the same facility, both on Medicaid, the income cap is twice that amount. If an applicant’s income exceeds this amount, a Qualified Income Trust (QIT), also known as a Miller Trust, can be used to meet eligibility – the amount of income in excess of the cap is deposited into the trust every month.
There are certain exceptions to countable income, including a Personal Needs Allowance (currently $160.00 a month if residing in a skilled nursing facility. There is a formula to determine this amount if residing in an assisted living facility), premiums for Medicare supplemental insurance and Part D Medicare, a community spouse income allowance (CSIA), and dependent’s allowances, if applicable. The amount that the community spouse receives from the Medicaid recipient's income ranges from the minimum monthly maintenance needs allowance (MMMNA) up to the maximum income allowance (MMMNA). Depending upon a formula that computes the CSIA, the community spouse may be entitled to some or all of the applicant's monthly income. The minimum amount that can be received is $2,465.00, and the maximum amount that can be diverted to the community spouse is $3,853.00.
Is Medicaid Readily Available?
Nursing Home (ICP) Medicaid is readily available in Florida for those individuals who meet the asset, income and ADL criteria. However, the federal government does not require the state to provide Medicaid funding for those who need care at home or reside in a community setting such as an assisted living facility (ALF). In February 2013, the state set a 5 year cap of 37,000 individuals who may receive Medicaid for home care and ALFs. As of January 2019, the waiting list had more than 52,000 individual applicants. According to a national study conducted by the AARP, the Commonwealth Fund and the SCAN Foundation, released on June 19, 2014, Florida ranks as one of the nation's worst states in helping to keep seniors living independently and out of nursing homes. It ranked Florida at No. 43 overall on five measurements, including nursing home affordability, quality of care, and support for family caregivers. One of the key factors for the low ranking was the failure to provide adequate funding for home based care.
What are Exempt Assets for Purposes of Medicaid?
A person applying for Medicaid is given a standard countable asset allowance of $2,000.00 ($3,000.00 if both spouses are on Medicaid). If the applicant is married, there is a community spouse resource allowance (CSRA) of $154,140.00 for 2024. The CSRA may be increased by appealing via a Fair Hearing, or by filing a Petition for Support Outside of Divorce. There are also a number of non-countable exempt or excluded assets, including a home owned by a single Medicaid applicant who has the intent to return that has no more than $713,000.00 in equity value, a home of any value occupied by the spouse or disabled child of an applicant, household goods and personal effects of reasonable value, one car of any value, an additional Vehicle 7 years or older, $2,500.00 designated for burial funds, a pre-paid irrevocable funeral plan and multiple burial plots for immediate family members. There are planning techniques and transfers permitted under federal and state Medicaid rules that can help the community spouse protect resources beyond the community spouse resource allowance.
Look-back Period
The “look-back period” is the time during which unauthorized transfers of assets (those made for less than full market value) triggers a period of ineligibility for Medicaid for long-term care. The Deficit Reduction Act of 2005 (DRA), implemented in Florida on November 1, 2007, changed the look-back period from three to five years. There was much confusion as to how to apply this. On January 1, 2010, new legislation, referred to as the “glitch rule” gradually phased in the longer term, month by month, until we reached a 60 month look-back period in January 2015.
Uncompensated Transfer Penalty
The amount of the unauthorized transfer is divided by the average monthly cost of nursing home care in Florida to give the number of months of ineligibility for Medicaid. That monthly cost figure used to be set at $5,000.00, but since April 2012 it has been updated periodically and it is $10,438.00 as of 2024. The look-back period begins to run when an individual becomes eligible for Medicaid (if not otherwise unqualified), not on the date that the unauthorized transfer occurred.
Medicaid Reform Movement
The 2011 Florida legislative session passed a Medicaid reform act called the Statewide Medicaid Managed Care Long-Term Care Program (SMMC). There are two parts to the Medicaid Reform movement, the Florida Medicaid Long-Term Care Program (LTC MCP), and the Florida Managed Medical Assistance Program (MMA). Under the first part, long-term care services must be provided through managed care organizations, private companies that have contracted with the state to provide this service. Our Region 9 (Indian River, St. Lucie, Martin, Okeechobee and Palm Beach Counties) has 4 managed care agencies that are authorized to offer this service. This program was launched in our region on September 1, 2013. The legislation seeks to put as many people as possible in less restrictive care settings. There is a mandatory rebalancing of 35% of nursing home residents into less restrictive environments. This has been referred to as “Granny Dumping for Bonuses” because the same agencies charged with overseeing the new program will receive bonuses for relocating persons who reside in nursing homes.
The Managed Medical Assistance Program rolled out in our region on August 1, 2014. It is comprised of several types of managed care plans: HMOs, PSNs and Children’s Medical Service Networks. Private companies contracted with the state to oversee services such as doctors' visits, prescriptions and hospital stays. Most Medicaid recipients must enroll in the MMA program. It does not change their Medicare benefits.
Does Medicare pay for Long-Term Care?
Medicare Part A (hospital insurance) covers rehabilitation nursing care in a skilled nursing facility (SNF) under certain conditions for a limited time. Medicare covers a maximum of 100 days of rehabilitation care in a nursing home. You must be hospitalized as an inpatient for three days (3 midnights) and enter the nursing home either directly from the hospital or within 30 days of discharge. The first 20 days are generally paid in full. For days 21 thru 100, there is a $170.50 per day co-insurance payment. Secondary insurance may pay for this. Some hospitals have been classifying patients as being in for "observation" so that the hospital is paid under Part B at a higher rate than Part A would pay. This results in a patient's rehabilitation not being covered by Medicare. There is proposed legislation to stop this practice, not only because it is unfair to the patient, but also because it is a major cause of the drain on Medicare funding. Previously, Medicare only paid for rehabilitation, not for chronic care. So, if you were not improving, the Medicare coverage would usually end before the 100 days had run. A class action lawsuit, Jimmo vs. Sibelius was filed challenging the improvement requirement. That case was settled in federal court on October 16, 2012. The federal judge approved the settlement and certified it as a class action, applicable to all states, on January 24, 2013. Pursuant to the settlement, Medicare must pay up to 100 days for skilled nursing or therapy services provided by a skilled professional that are deemed necessary to maintain a person’s condition or to prevent further deterioration. In accordance with the settlement, The Center for Medicare & Medicaid Services (CMS) has revised the Medicare Benefit Policy Manual.
