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Medicaid FAQs

Please click a link below to view a video answering these questions.

What is medicaid planning?

“Medicaid planning is talking to individuals about nursing home care. Medicaid will pay for nursing home care if an individual is a certain age and if they are disabled. So we talk to clients about how to get individuals qualified for Medicaid. We look at their financial situation. We make recommendations about how to spend down their assets appropriately. They may need trusts set up. There is a lot of planning tools that we can use to help get them qualified for Medicaid quicker than they would be able to on their own and with less hiccups.”

What is medicaid planning?

Medicaid planning is talking to individuals about nursing home care. Medicaid will pay for nursing home care if an individual is a certain age and if they are disabled. So we talk to clients about how to get individuals qualified for Medicaid. We look at their financial situation. We make recommendations about how to spend down their assets appropriately. They may need trusts set up. There is a lot of planning tools that we can use to help get them qualified for Medicaid quicker than they would be able to on their own and with fewer hiccups.

Why is it important to contact a medicaid planning attorney?

So some of the penalties that can be involved in improper Medicaid planning are that you can really hit a disqualification period, where you basically may be up against a disqualification period that goes for years. Because if you do something like give away assets and then you can’t get them back or they got spent by a family member, or you sold your house and gave the proceeds to your kids, those types of penalties, the penalty periods can be quite extensive. There are ways to offset that, however, if you do it before you apply. So you want to make sure that you contact a Medicaid planning attorney before you make an application, not after, because once that disqualification period is applied, it is difficult to undo it.

When is the right time to start medicaid planning?

Medicaid planning can be started early on, and we’ve done it in crisis situations. So if you anticipate that nursing home care is coming and your family member’s not going to be able to afford that, it’s ideal to start it a year or 18 months out. But we’ve had cases where the person’s going to need a nursing home next week, and we can also do planning then too.

Why is it important to stay educated on medicaid planning?

So Medicaid planning is a technical, procedural process, but you really can’t do it without an attorney, because you have to do deeds, you have to do these contracts, I mean, it’s technical. If you’re going to do Medicaid planning, use an attorney who is versed in Medicaid planning. They do lots of Medicaid planning cases. They sound like they know what they are talking about when they talk about Medicaid because it is very technical and it changes every day. I probably spend 15 to 30 minutes a day just on the listservs educating ourselves about what are the new rules coming out with regard to Medicaid. What new processes is our district applying? So it is very important to use an attorney who is up on the rules and the changes in the law every day.

What is a personal services contract?

Another way to deal with getting qualified for Medicaid, if you are over assets, is doing things like personal services contracts. Personal services contracts are agreements between family members usually or other care providers, friends, and neighbors where they agree to provide services to you until you die, and in exchange at the set Medicare hourly rate, they pay you to provide those services. Now, there are a lot more technical details to this, but for the most part, if you are like an 89-year-old woman, your life expectancy is probably about three and a half years. You can pay someone in one lump sum to provide care to you for three and a half years and take that lump sum out of your assets. So, if you have $102,000 and you can put $100,000 into that personal care contract, you’ve now gotten yourself down to the point where you can qualify for Medicaid. Yet, you’ve been able to provide to usually a daughter or a son payment for all of the services that they are going to provide to you until you die, and we can get you qualified very quickly.

How do rental income producing properties work?

So one of the other techniques that we often use in Medicaid planning is something called rental income-producing property. Rental income-producing property is permitted by Medicaid. So let’s say, for example, you have $100,000 in extra assets over and above that $2,000 limit. Medicaid allows you to take that $100,000 and invest it in rental income-producing property. Now, that can be an apartment. There are actually some organizations that exist in Florida that will take your $100,000 and put you into a part-shareholder investment, like in an apartment building, that sort of thing. But we can get that $100,000 invested in rental income-producing property and get you qualified for Medicaid. Now, why would you want to do that, if all of your income goes to Medicaid? Which it does; pretty much all your income is going to go to Medicaid. But then we use the strategy of enhanced life estate deed. So you take that $100,000, you put it into the rental income-producing property, and then you have an enhanced life estate deed on that rental income-producing property. So that $100,000 that you bought a little house with, that is providing income to you, the income goes to Medicaid after you pay for the maintenance on that property, so you get to pay for the maintenance and repairs. But then, when you die, because it is in an enhanced life estate deed, it does not go through probate. It passes on your date of death to your named beneficiaries on that deed. So it is going to immediately pass to your children, and you have been able to provide them with a $100,000 gift upon your death. You have actually have been able to leave an asset to your kids, that you otherwise would have had to spend down to get qualified for Medicaid. So Medicaid is happy because they got the rental income that helps offset their cost. Your family is happy because you have been able to provide them with something upon your death. You are happy because you have been able to provide them with something upon your death that you worked so hard your whole life to save up this $100,000. So it really works for everybody. But, unless you do the Medicaid planning and understand that some of these options are available to you, you could end up just spending down that $100,000 instead of having it provide benefit, not just to your family, but also to Medicaid themselves.” Now, there is a lot more technical details to this, but for the most part, if you are like an 89-year-old woman, your life expectancy is probably about three and a half years. You can pay someone in one lump sum to provide care to you for three and a half years and take that lump sum out of your assets. So, if you have $102,000 and you can put $100,000 into that personal care contract, you’ve now gotten yourself down to the point where you can qualify for Medicaid. Yet, you’ve been able to provide to usually a daughter or a son payment for all of the services that they are going to provide to you until you die, and we can get you qualified very quickly.”

If you or someone you care about needs assistance with Medicaid planning, we can help. Contact The Miller Elder Law Firm today for an initial consultation at (352) 379-1900 or fill out our convenient contact form.

We are ready to guide you through the beautiful sunsetting of your life.