Can I Get Medicaid if I Have Money in the Bank?
Can I Get Medicaid if I Have Money in the Bank?
If you've been diligently saving for years and have built up a nest egg, you might be wondering if you can still qualify for Medicaid in Florida. The good news is that, with proper planning, having money in the bank doesn't automatically disqualify you from Medicaid benefits.
In fact, with medicaid planning and understanding of Florida's Medicaid long-term care program rules, you can protect a significant portion of your assets while still qualifying for the care you need (without having to wait five years and without having to go broke first!).
Medicaid Asset Limits in Florida
Medicaid is a joint federal and state program that provides health coverage to eligible low-income individuals. In Florida, the Medicaid program has strict asset limits for applicants. As of 2024, the general asset limit for an individual applying for Medicaid’s long term care programs (i.e. ICP, Medicaid Waiver or PACE) is $2,000. For married couples where both spouses are applying, the limit is $3,000.
However, it's important to note that not all assets are counted towards this limit. Some assets are considered exempt, meaning they don't count towards the Medicaid asset limit.
Exempt Assets for Medicaid Eligibility
Several types of assets are exempt from Medicaid's asset calculations:
- Primary residence: Your home, up to a certain equity value, is typically exempt.
- One vehicle: Usually, one car per household is exempt.
- Personal belongings and household items
- Burial plots and prepaid funeral arrangements
Non-Exempt Assets
Non-exempt assets, which do count towards the Medicaid asset limit, include:
- Cash
- Checking and savings accounts
- Certificates of Deposit (CDs)
- Stocks and bonds
- Real estate other than your primary residence
- Additional vehicles beyond the one exempt vehicle
- Certain life insurance policies with cash value
Does Medicaid Require a Separate Bank Account for a Community Spouse?
When one spouse requires Medicaid for long-term care while the other spouse (known as the community spouse) remains healthy and doesn't need Medicaid, questions often arise about how to manage their financial accounts. This situation is common, and understanding the requirements is crucial for proper Medicaid planning.
The Community Spouse Resource Allowance (CSRA)
In 2024, the community spouse is entitled to a Community Spouse Resource Allowance (CSRA) of slightly over $154,000. This allowance is designed to prevent the impoverishment of the healthy spouse while allowing the other spouse to qualify for Medicaid.
Separating Assets for Medicaid Eligibility
The short answer is yes, the community spouse will typically need to have their own separate bank account or brokerage account. Here's why:
- Clear Delineation of Assets: Separating accounts makes it easier to demonstrate which assets belong to the community spouse and which belong to the Medicaid applicant.
- Protecting the CSRA: By having a separate account, the community spouse can clearly show that their assets are within the allowed CSRA limit.
- Avoiding Commingling: When couples have co-mingled their money, it can be challenging to determine which assets belong to whom. This can complicate the Medicaid application process.
- Simplifying the Application Process: Having separate accounts streamlines the Medicaid application and makes it easier for caseworkers to verify eligibility.
Steps to Separate Accounts
- Open New Accounts: The community spouse should open new bank and/or brokerage accounts in their name only.
- Transfer Funds: Move the appropriate amount of money (up to the CSRA limit) into the community spouse's new accounts.
- Document Transfers: Keep clear records of all transfers to demonstrate compliance with Medicaid rules.
- Consult a Professional: Given the complexity of Medicaid rules and the potential consequences of mistakes, it's advisable to work with an elder law attorney or Medicaid planning lawyer.
Strategies for Qualifying for Medicaid with Money in the Bank
If you have assets that exceed the Medicaid limit, there are legal strategies you can employ to potentially qualify:
- Spend Down: Use excess assets on exempt items or necessary expenses.some text
- Medicaid Asset Protection Trusts: Transfer assets to an irrevocable trust (however, this strategy only works if you have five years to plan)
- Medicaid Planning Crisis Strategies: There are a host of legal and ethical strategies that we can discuss utilizing for those who want help paying for home care or facility care without having to wait five years.some text
- Gifting is prohibited within five years of applying except for spousal transfers.
- Spousal transfers: Transfer assets to a community spouse.
By working with our Medicaid planning professionals at Elder Needs Law, you can explore these strategies to ethically qualify for Medicaid while protecting your assets. Let us guide you through the process to ensure you make the right decisions for your situation.
Get Help to Protect Your Assets and Secure Your Medicaid Benefits
If you're in Florida and considering applying for Medicaid to help pay for home health care, assisted living, or nursing home care, it's essential to understand your options. You may be able to qualify for Medicaid without waiting five years, without depleting all your assets, and without selling your home.
While having money in the bank doesn't automatically disqualify you from Medicaid in Florida, it does require careful planning and potentially restructuring your assets. By understanding the rules around asset limits, exemptions, and strategies like the Community Spouse Resource Allowance, you can make informed decisions about your long-term care planning.
Remember, Medicaid rules are complex and subject to change. What works for one person may not be the best strategy for another.
Consult with our Medicaid planning professionals at Elder Needs Law to explore your options and protect your assets while securing the benefits you need. Contact us today to get started.
