Medicare beneficiaries increasingly rely on long-term services and supports (LTSS) – or long-term care – which is mostly not covered by Medicare. In fact, 20% of Medicare beneficiaries who lived at home received some assistance with LTSS in 2015. Medicaid fills this gap in Medicare coverage for long-term care, but its complex eligibility rules can make qualifying for benefits difficult. What’s more – eligibility rules vary significantly from state-to-state.
Florida is known as an “income cap state,” because applicants only qualify for Medicaid long-term care benefits if their income is below the eligibility limit. Florida does not allow seniors with slightly higher incomes to pay what they can afford toward their care and have Medicaid pay the rest. This means applicants with modest incomes just above the eligibility limit can struggle to pay for long-term care. Fortunately, these individuals can become eligible for long-term care benefits by depositing income into a Qualified Income Trust (which is described below).
Applicants seeking long-term care benefits have to undergo a level of care assessment.
Medicaid nursing home coverage
Most seniors used to receive long-term care in nursing homes. Today, more Americans receive LTSS in their homes. But some enrollees’ medical or living circumstances make nursing home care a better fit.
Income limits: The income limit is $2,742 a month if single and $5,484 a month if married (and both spouses are applying).
If only one spouse needs Medicaid nursing home care, the income limit for single applicants is used – and usually only the applicant’s income is counted.
Even though the income limit is $2,742 a month (if single), nursing home enrollees are not allowed to keep all of their income up to this limit. Instead, they have to pay all but a small portion of it toward their care, but can keep a small personal needs allowance (of $130 each month) and money to pay for health insurance premiums (such as Medicare Part B and Medigap).
Assets limits: The asset limit is $2,000 if single and $3,000 if married (and both spouses are applying). If only one spouse needs Medicaid, the other spouse can keep up to $148,620.
In Florida, the asset limit for nursing home enrollees increases – to $5,000 if single and $6,000 if married – if an applicant’s income is below $997 a month if single and $1,343 a month if married, meaning they also qualify for Medicaid AD.
Certain assets are never counted, including many household effects, family heirlooms, certain prepaid burial arrangements, and one car.
A first home is not a disqualifying asset for applicants who have less than $688,000 in home equity.
Home and Community Based Services (HCBS) waivers
Each state’s Medicaid program offers community-based long-term care through Medicaid. These services are provided in an enrollee’s home or an adult day care center, and are called Home and Community Based Services (HCBS). Enrollees continue living in the community, and don’t have to enter a nursing home.
Income limits: The income limit is $2,742 a month if single and $5484 a month if married (and both spouses are applying). When only one spouse needs HCBS, the income limit for single applicants is used – and only the applying spouse’s income is counted.
Asset limits: The asset limit is $2,000 if single and $3,000 if married (and both spouses are applying). If only one spouse needs Medicaid, federal rules allow the other spouse to keep up to $148,620.
In Florida, the HCBS asset limit increases – to $5,000 if single and $6,000 if married – if an applicant’s income is below $997 a month if single and $1,343 a month if married, meaning they also qualify for Medicaid AD.
HCBS enrollees can’t have more than $688,000 in home equity.
Spousal impoverishment protections in Florida
Eligibility rules for Medicaid LTSS programs differ from other Medicaid benefits when only one spouse is applying. When this occurs, only the applying spouse’s income is counted. (With other Medicaid benefits, both spouses’ incomes are counted – regardless of who applies.)
Federal rules that protect against spousal impoverishment allow the spouses of Medicaid LTSS recipients to keep a Minimum Monthly Maintenance Needs Allowance (MMMNA) from their Medicaid spouse’s monthly income, along with resource and housing allowances. This rule is particularly helpful to nursing home enrollees, who would pay most of this income toward care if they weren’t able to transfer some of it to a spouse.
In Florida in 2022, these community spouses are allowed to keep:
Permitted home value in Florida
Federal law requires states to restrict eligibility for nursing home Medicaid and HCBS to applicants with a home equity interest below a certain dollar amount. In 2022, states set these home equity levels based on a federal minimum home equity of $636,000 and a maximum of $955,000.
Florida has chosen to have the most restrictive limit on home equity – meaning that applicants for LTSS can’t have more than $688,000 in home equity.
Penalties for transferring assets in Florida
Because long-term care is expensive, individuals can have an incentive to give away or transfer assets to others so they can become eligible for Medicaid LTSS benefits. To curb this incentive, federal law requires states to have a penalty period for Medicaid nursing home applicants who give away or transfer assets for less than their value. States can also choose to have an asset transfer penalty for HCBS. Medicaid will not pay for an enrollee’s LTSS during this penalty period.
Florida has an asset transfer penalty for nursing home care and HCBS. This penalty is based on a 5-year lookback period during which asset transfers and gifts are prohibited. The length of the penalty period is determined by dividing the value of what was given away or transferred during the lookback period by the average cost for private pay nursing home care (which is $10,809 a month in Florida in 2023).
Estate recovery in Florida
Medicaid agencies must have estate recovery programs that try to recoup Medicaid’s payments for long-term care related benefits received starting at age 55. States have the option to also recover the cost of all Medicaid benefits. This is called estate recovery.
Florida has chosen to pursue estate recovery for all Medicaid costs received beginning at age 55.
But the state will not attempt an estate recovery if an enrollee is survived by their spouse or a child living at home (who is under 21, blind or disabled).
