In Florida, key assets exempt from Medicaid's asset test include your primary home, one vehicle, personal belongings, burial plots/prepaid plans, and some retirement/life insurance accounts, allowing individuals to keep essential property while qualifying for benefits, though limits apply to home equity and life insurance cash value.
The Requirements
The good news is Medicaid only counts certain assets for The Asset Test. Florida does not allow an applicant to own countable assets worth more than $2,000.
Countable assets are those resources that are considered when determining a person's eligibility for Medicaid. The following is a breakdown of typical countable assets under Florida Medicaid: Cash, Bank Accounts, and Savings. This includes checking accounts, savings accounts, and cash on hand.
The best way to save your house from Medicaid recovery is to put it into an irrevocable trust. A trust protects the home because the individual no longer owns it.
Medicaid agencies can and will look at your balance from any bank account you've had in the last five years. They may also conduct property checks using public records like deeds.
Medicaid also exempts your vehicle when determining financial eligibility. An applicant is allowed to own one car that's not included in your resource limit if it's used for transportation or by another person living in the house, such as a spouse. You also don't have to be the driver of the vehicle.
To minimize the impact of Medicaid estate recovery, consider strategies such as:
Starting January 1, 2024, the asset test to qualify for a Medicare Savings Program was eliminated. This means individuals can have any amount of assets and still qualify for a Medicare Savings Program.
If you already have some legal experience, you might see how an asset protection trust is excellent for protecting assets from litigation and creditors. By removing ownership of the valuable assets in question away from you and your immediate family members, you make those assets practically untouchable…
Asset Definition & Exceptions
There are also many assets that Medicaid considers to be exempt (non-countable). Exemptions include personal belongings, household furnishings, an automobile, and generally one's primary home. In Florida, IRAs in payout status are exempt.
Florida's 5-year Medicaid rule, or "look-back period," requires the state to review financial transactions for the 60 months before a long-term care Medicaid application to find any assets given away or sold for less than fair market value (FMV). If such transfers are found, a penalty period of ineligibility is imposed, calculated by dividing the transferred amount by the average monthly cost of nursing home care, delaying benefits to discourage asset hiding.
The short answer is: You don't have to sell your home to qualify for Medicaid in Florida, as it's generally exempt so long as you meet specific criteria. However, there are a number of caveats that affect this exemption, which Florida Medicaid applicants should be aware of.
Unless you take steps to protect them, most assets are not protected in a lawsuit. One of the few exceptions to this is your employer-sponsored IRA, 401(k), or another retirement account.
Upon one's death, the state will file a claim against their estate, including one's home, to collect funds for repayment of nursing home care expenses. Not all states use liens as a means of reimbursement for Medicaid funded long-term care. While Estate Recovery is required by all states, liens are not.
A Medicaid Asset Protection Trust is exactly as it sounds—a trust designed to protect assets from being counted for Medicaid eligibility. An MAPT allows a person to qualify for long term care benefits from Medicaid, while protecting assets from being depleted if long-term care is needed.
The primary purpose of a Florida Medicaid Asset Protection Trust is to protect assets from being counted towards Medicaid's asset limit. By transferring assets into an irrevocable trust, individuals can effectively remove them from their ownership, making them exempt from Medicaid's calculations.