What IS Medicaid Planning? Part I

If you're confused, you're not alone. Most of us know that Medicaid is a federal health insurance program for low income people. Ok. But how are you supposed to plan to have Medicaid? Or worse, does Medicaid Planning mean planning to be low income? The short and confusing answer is – yes and no.

First, let me make clear that I am not any sort of attorney, let alone an Elder Law Attorney. Yet, I think I have knowledge and insight into all of this from my personal experiences with my mother. My mother was on Medicaid the last two and a half years of her life, and if she had not qualified for Medicaid her last years would have been much different. Without Medicaid she literally could not have been able to afford to live in an Assisted Living Facility. Mom had no assets. She had sold her house years before, did not own a car, had no investments – she only owned her furniture and personal items. Some of this was likely purposeful on her part. She had rented a condo from me at least 10 years earlier and when I asked her if I could add her name to the deed so that she could homestead the property, she refused. She said no, that in case she had to go in a nursing home, she didn't want them to be able to take the property. That's really not the rule. She was wrong on that. But, I know now how she was thinking and probably why she didn't own a house or condo anymore.

I am a Florida legal document preparer and strictly forbidden by the Florida Supreme Court and the Florida Bar to assist anyone with Medicaid Planning. However, I think, and hope, the right to free speech, First Amendment to the U.S. Constitution is still in place and on my side in trying to explain how Medicaid Planning works. This article only speaks about Medicaid Planning in Florida. Because, although Medicaid is a federal program each state has different rules as to how they administer the program.

This is Part I of a series, and first I'll explain my mother's financial situation and why she qualified to begin with. Mom was 96 years old when she applied (rather we applied for her), she was in relatively good health, and her only income was her social security income. She received around $1800. per month in social security.

For a time, she actually could and did manage financially to live in an apartment on her social security income alone. But with age she became forgetful. When we found out that Mom wasn't paying her utility bills on time, my sister asked Mom to sign a Power of Attorney and took charge of her finances. Looking to Mom's future needs, my sister and I started looking around for an Assisted Living Facility. Mom had glaucoma for many years which was controlled by using daily eye drops. She could see, but as she grew older her eyesight diminished. When she couldn't safely cook her own meals anymore, she came to live with my husband and me.

Having Mom in our house was difficult. I was happy to be able to help, and thankful that she didn't need any personal care. But, I cooked, cleaned, washed her clothes, took her to her doctors, and set up social activities for her. The social thing was the hardest for my mom, she liked being around people. I think she found my husband and I boring. Our company wasn't enough to entertain her. I was exhausted.

I was aware that Mom was entitled through her Medicaid to receive 10 hours per week of home health care. I called an agency, but they never returned my call so I just kept doing what I was doing. By now Mom had a caseworker through her Medicaid and besides knowing that Mom was entitled to home health care, I learned that she was also entitled to long term care because of her Medicaid.

So we looked around for an Assisted Living Facility that was affordable and that fit her criteria. She requested that the facility be at the beach and that she have a private room. We found one that fit the bill. If she were to self pay the cost would have been around $2400 per month -- $800. more than her monthly income. But, since she had Medicaid long term care through United Health Care, Medicaid picked up the difference. The various facilities that accept Medicaid have contracts set up with the long term care insurance providers and subsidize the costs. About a year later, when I noticed that the ALF was going downhill we moved her to a different one. The second one was slightly more expensive. Self pay would have been $3000. per month. But the difference in the self pay cost made no difference in my mother's finances. She handed over her $1800. and she received the same services as if she had paid entirely out of pocket.

My mother was able to live in an Assisted Living Facility with absolutely no out of pocket expenses. By law, she was entitled to keep $54 per month of her social security income for incidental expenses, like haircuts, and snacks. The amount sounds excessively paltry until you consider that she didn't have anything to spend her money on anyway. She was happy and comfortable with activities to engage in, and a staff to help her. The medical staff at the ALF gave her eye drops twice a day as prescribed, and gave her other pills or medications as needed. The structured environment suited her as the meals were at a set time everyday and she had menu choices. The few times that she was late for a meal, someone would knock on her door to make sure she was alright. I was close enough to the facility so that I could visit as often as I liked, and tried to go see her at least a couple of times per week. And, most importantly to her, there was always someone around to talk to.

As of October 2018, the income cap to receive Medicaid was $2250. For a single person, the asset ceiling is $2000. In my mother's scenario she automatically qualified because her circumstances neatly fit the criteria, but what about people whose income is too high, or have assets valued at more? And what about married couples?.

In parts II, III, and maybe IV, I'll try to explain these other scenarios. Both my sister and I are college educated, but finding the information, keeping up with the paperwork, and understanding the options was still daunting. Whether you're reading this for yourself, or for mom, dad, grandma, or grandpa – educate yourself as much as possible. You may ultimately need to see an elder law attorney, but having the information in advance, may save you time and money in the long run.