Misconceptions About MEDICAID
On a regular basis we meet with families facing long-term care issues who make decisions based upon an incomplete understanding of the laws and rules concerning Medicaid. Sometimes the information is obtained from friends and relatives who have navigated the Medicaid system in another state.
While Medicaid has federal implications, it is administered on a state level and state laws impact this administration. Different rules also apply for single and married individuals, so families sometimes make decisions based on rules that apply to someone with a different marital status or circumstances. Below are several common misconceptions that we frequently hear.
Common Misconceptions About Medicaid
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I have to spend all of my assets in order to get Medicaid.
Certain assets — including a home, a vehicle, certain burial plans, and limited life insurance — are not considered countable assets when applying for Medicaid. Additionally, a married applicant’s spouse can retain a significant amount of assets through the Community Spouse Resource Allowance. IRAs may also be exempt if an appropriate amount of income is withdrawn. With proper Medicaid planning, applicants may be able to protect substantially more assets.
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I can only spend down my assets on nursing home expenses.
If long-term nursing home care is required and Medicare or insurance benefits have been exhausted, private payment will be required until Medicaid eligibility is achieved. However, funds can often be used for a variety of purchases that benefit the applicant or their spouse. Many options under Medicaid rules may help speed up qualification while protecting assets.
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I can “hide” my money and then apply for Medicaid.
Intentionally providing false information on a Medicaid application is fraud and carries civil and criminal penalties. When our firm assists clients with Medicaid applications, we fully disclose all relevant financial information to the Department of Children and Families. None of the legal planning strategies involve hiding assets from the government. Government agencies can legally share financial information, and applicants must sign releases allowing the state to obtain financial records from financial institutions.
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I can give away $19,000 per year.
This misconception stems from federal gift tax rules and has nothing to do with Medicaid eligibility. In Florida, gifts made during the Medicaid look-back period may create a penalty period of ineligibility. The penalty period begins only after the applicant is otherwise eligible and requires care. Even if the IRS does not impose a gift tax, Medicaid rules still apply.
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What happened with my parent’s Medicaid application in another state will happen the same way in Florida.
Each state administers Medicaid differently and interprets the rules in its own way. States establish their own exemptions and procedures. Planning opportunities exist in every state, but the rules vary significantly. Working with an experienced elder law attorney who understands Florida’s Medicaid rules is essential.
Medicaid planning is a complex field. Misunderstanding the rules can lead to costly mistakes or unnecessary loss of assets. Families facing long-term care decisions should seek qualified legal guidance to ensure they understand their options and develop the best plan for their situation.
If you have questions about Medicaid eligibility or long-term care planning, please contact Burzynski Elder Law at 239-434-8557.
