Long Term Care and Medicaid
Portia B. Scott, J.D., L.L.M. • April 1, 2021

Look Backs and Bright Lines - What you need to know.

You may already know that when applying for Long Term Care through Florida’s Medicaid Program, there is a “look back” period of 60 months, That is, Medicaid may temporarily disallow benefits otherwise payable for Long Term Care (such as for skilled nursing facilities) if there were disqualifying transfers of assets in the 5 years immediately preceding the claim. Certain transfers are allowed, which is part and parcel of some Medicaid Plans, but out-right gifts are usually disqualifying events. 

 

Until recently, there was no comparable look back period for Veterans’ benefits such as War time Pension, with or without Homebound enhancement or Aid and Attendance enhancement.

 

That changed October 18, 2018. The VA now has a look back period and it seems the VA is going to keep it. The VA benefits, when received, remain “needs based,” payable monthly and are tax-free. However, the VA will consider all transfers made during the 36 months immediately before the application is submitted.

 

Also, there is a “bright line” asset limit. Until November, 30, 2021 that asset cap is $130,773.00 and it will be subject to COLAs which are tied to Social Security COLAs. Those assets do not include homestead, furnishings or a car but do include the applicant’s annual income. This bright line replaces the old case-by-case analysis where the VA would be asked to determine if it seemed “fair” for the applicant to receive a pension, though the general rule of thumb was an asset cap of around $50,000.00 to $75,000.00.

 

Only if the applicant has assets above the $130,773.00 figure (including those gifted or transferred at less than full market value during the 36 month look back period) is there a possible disqualification period. 

 

If the applicant, for example, had $100,000.00 in assets in January and gave $14,000.00 to each of his 5 children in February and submitted his application in March, he would not have a disqualification period for his pension. (The $100,000.00 total assets less the 5 gifts of $14,000 results in a balance of $30,000,00 remaining assets. However, since he was not above the asset cap to begin with, there is no Disqualification.)

 
By contrast, if another applicant had $200,000.00 in assets and gave comparable gifts, she would be looking at a disqualifying period during which she would not receive a pension. The amount of time she would be disqualified is, currently, the amount over $130,773.00 she gave away divided by the maximum pension awardable at the time of the application. So, $200,000.00 - $130,773.00 = $69,227.00 this is the maximum amount she will be determined to have disqualifyingly transferred. That $69,227.00 is divided by the maximum pension which results in the disqualifying period. That disqualifying period will begin on the first day of month immediately after the month in which the transfers were made.

 

There are, of course, tools which can be used to allow an applicant to qualify, including regaining possession of the disqualifying transfers and then making the transfers in a manner which is not disqualifying.

 

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Odd Laws - Iceland

By Portia B. Scott, J.D., L.L.M. • January 31, 2025
Odd Law - Iceland

MEDICAID IN FLORIDA Part I

By Portia B. Scott, J.D., L.L.M. • June 11, 2024
Medicaid planning is a complicated concept with many moving parts, all of which need to work in tandem and cohesively together to achieve the goal of providing quality long term care and/or nursing services to a Floridian in need. People often merely state that Medicaid is always a payor of last resort, but that expression needs to be defined and discussed as part of an over-all plan. The first issue addressed, then, is what is meant by “The payor of last resort?” Medicaid is, indeed, the payor of “last resort.” Briefly, this means, when all other medical assistance care is gone, Medicaid may step up and help pay for some uncovered medical expenses. Although Medicaid is a Federal program, it is administered on a State-by-State basis. When Medicaid was first being created, each state in the Union submitted their own plan on how the funds available to their own State’s Medicaid applicants. Florida submitted its plan which continues (with some tweaks) as to be used by Florida’s Medicaid system. If the applicant (the “patient”) otherwise qualifies for Medicaid in Florida, the State’s Medicaid program will help pay the expenses of Long Term Care, including Nursing Home Care. So, if the patient has a privately purchased policy for Long Term Care Insurance, those benefits will have to be fully depleted before Medicaid will provide any financial help. If the patient has more than $2,000.00 in “countable assets,” those will need to be spent before Medicaid will help. (We do mean “spent,” too; not gifted away!) If the patient is on Medicare, Medicare will step back and no longer pay once Medicaid has taken over. This means that the patient’s Medicare premium will no longer be deducted from any Social Security payment, increasing the net income of the patient. Further, there will no longer be a need for supplemental health insurance since the policy (Medicare) which was being supplemented, no longer is paying. When good planning has been implemented, including, at times, some of the countable assets of the patient having been legally and permissibly transformed into uncountable assets, Medicaid will step in to help pay for the Long Term Care Nursing Home expenses. This is what is meant when the term “payor of last resort” is used.
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