Medicaid benefits for long-term care can help families retain a significant portion of their savings when a loved one needs long-term nursing home care. Long-term care is exceptionally expensive: In 2023, the average monthly cost for a nursing home was $11,406 per month in a private room, and $9,885 in a semi-private room (Genworth Cost of Care 2023 survey). Little wonder so many families fear losing their financial security to nursing home expenses.
To qualify for Medicaid benefits, the applicant may have no more than $2,000. The well spouse, if there is one, may retain up to $154,140 (as of 2024; the number changes annually). However, not everything you own is considered an asset by Medicaid. There are exempt assets that do not count against eligibility. Below is a summary of these protected assets.
Homestead
Medicaid considers the homestead to be an exempt asset if the equity in the house is $713,000 or less (effective January 1, 2024; number revised annually each January). Home equity is calculated using the current market value of the home, minus any debt.
Medicaid’s home equity policy does not apply if any of the following individuals reside in the Medicaid applicant’s home: the applicant’s spouse; the applicant’s child under age 21; or the applicant’s blind or disabled child of any age. The home equity policy may be also waived by Medicaid when denial of long-term care benefits would result in demonstrated hardship to the individual.
Motor Vehicle
One motor vehicle is considered exempt, regardless of the vehicle’s age or type. Also exempt is a second vehicle if it is over 7 years old, except for certain luxury, antique or customized vehicles (unless used by person with a physical disability).
Personal Property
Personal property is considered an exempt asset, except for certain valuable art and jewelry.
Life Insurance Owned by the Applicant
Life insurance is exempt if the total combined face value of all policies does not exceed $2,500.00. Term polices are exempt. If the face value exceeds this amount, the cash value will be included in the $2,000 asset level for the applicant.
Life Insurance Owned by the Well Spouse
The well spouse’s life insurance is exempt if the total combined face value of all policies does not exceed $2,500.00. Term policies are exempt. If the face value exceeds this amount, the cash value will be included in the $154,140.00 asset level for the community spouse.
Burial Plan for the Applicant
A plan up to $2,500.00 and/or an irrevocable prepaid plan in any amount is considered exempt.
Burial Plan for the Community Spouse
A plan up to $2,500.00 and/or an irrevocable prepaid plan in any amount is exempt.
IRAs, 401Ks, and 403Bs
Qualified plans are considered “hybrids” by Florida Medicaid because they can be treated either as assets or as income. Generally, if the applicant or the spouse is drawing from the qualified plan monthly on an actuarially sound basis, the plan can be treated as income, not as an asset. If the qualified plan is not being drawn from as income, it is considered an asset and is not an exempt assets.
Annuities
Annuities are considered an asset and not exempt, unless they are annuitized and the applicant or the applicant’s spouse is taking equal monthly installments in an actuarially sound fashion. Applicants and their spouses must disclose to the State of Florida any interest they have in annuities.
If the annuity was purchased on or after November 1, 2007, or if other transactions that change the course of any annuity payment or treatment of income or principal have been made on or after November 1, 2007, the State must be named as the remainder beneficiary either at the time of Medicaid benefits approval, or upon recertification. Also, the State must be named as a remainder beneficiary in the first position for the total amount of medical assistance paid by the State on the applicant’s behalf. If the applicant has a spouse, minor child or disabled child, the State must be named as the remainder beneficiary either in the first position, or the second position after the spouse, minor child or disabled child.
Income-Producing Property
Investments and income-producing property which are not easily liquidatable are unavailable and thus, treated as an exempt asset, so long as the applicant or spouse is receiving fair market value income from the investment. This does not apply to investments such as stocks, bonds and CDs. This applies mostly to rental property. Sometimes it can be a second home that is used and rented out. Other times, it will be commercial property invested in some form of partnership or other legal entity. Properly done, the asset will pass to heirs outside of probate and not be subject to Medicaid recovery.
With our guidance, even assets that are not exempt can sometimes be protected. If you have a loved one who needs care in a long-term care facility and you want to apply for Medicaid, consult with our attorneys, even if your loved one is already in a facility. We have helped thousands of families preserve their hard-earned assets. Call (561) 625-1100 to schedule your appointment.
