Medicaid law changes frequently. Our elder law attorneys carefully monitor changes in order to properly advise clients seeking Medicaid nursing home benefits. We can often recommend legal steps that allow clients to protect their assets and retain a good portion of their nest egg before they lose everything to nursing home costs, even when the client appears to be ineligible.
Effective January 1, 2023, three key eligibility requirements have changed:
Limits on Medicaid Applicant’s Gross Monthly Income
Effective Jan 1, 2023, the applicant’s gross monthly income may not exceed $2,742 (up from $2,523). The applicant may retain $130 per month for personal expenses.
If an applicant has excess income, the problem can be solved with the creation of a qualified income-only trust . The trust, which is irrevocable, holds the applicant’s excess income in a non-interest-bearing account. The funds are then used to pay the nursing home and other medical expenses. Someone other than the applicant must serve as trustee. When the nursing home resident passes away, Florida is entitled to whatever residual funds are in the trust. Only an experienced elder law attorney should set up a qualified income-only trust.
Limits on Well Spouse’s Assets
Effective Jan. 1, 2023, the Medicaid applicant’s well spouse (also known as the “community spouse”) may retain up to $148,620 in assets (up from $147,400). This is in addition to exempt, non-available, and income-producing assets.
Home Equity Limit
Effective January 1, 2023, the home equity cap increased to $688,000 (was $636,000). Home equity is based on the fair market value of the home, minus debt. If a home is held in any form of shared ownership, Medicaid considers the value of the applicant’s fractional interest.
The equity cap may be waived under one of the following conditions:
- The Medicaid applicant’s spouse resides in the home.
- The Medicaid applicant’s child under age 21 resides in the home.
- The Medicaid applicant’s child who is blind or disabled, regardless of age, resides in the home.
Also, the applicant must demonstrate that he/she intends to return to the home, even if in reality that is unlikely. Thus, steps must be taken to preserve the home for the applicant’s possible return. For example, renting the home to someone on a long-term lease is not advisable, as it would demonstrate that the applicants does not intend to return home. (Additionally, doing so would produce income which could also be a problem for eligibility.)
Many people who apply for Medicaid and their spouses worry unnecessarily that Medicaid may take their home after they pass away. Medicaid cannot recover the home if:
- The property is still the homestead property of the applicant when he/she passes away; and
- The applicant, at death, passes the house to constitutional heirs at law (spouse, children or grandchildren, siblings, nieces or nephews.) It is an unfortunate legal blunder when an applicant, without the guidance of a qualified elder law attorney and in hopes of protecting the home from a Medicaid lien, rushes to deed the home to children prior to applying for Medicaid. Giving away the home during the five-year lookback period preceding application will be considered a gift and will count against the applicant’s eligibility!
Contact The Karp Law Firm at 561-625-1100 for an appointment to discuss how you may protect your assets from long-term nursing home costs. To see more of the eligibility rules for nursing home benefits in Florida, click here.