Long Term Care and Nursing Home Facts for Florida

Interesting Facts About Long Term Care In Florida

Florida nursing homes are serving increasingly diverse patient base and providing a greater variety of acute care, rehabilitative and cost of long term care from elder law attorney medicaid lawyer in jacksonville, florida convalescent services that cannot be delivered elsewhere.

Key Facts

There are 683 licensed nursing homes in Florida, representing approximately 83,587 beds (Souce: Agency for Health Care Administration)
The estimated number of residents is 73,000 (roughly 85% occupancy at any given time)
There are 3,089 licensed ALFs in Florida, representing approximately 92,000 beds. (Souce: Agency for Health Care Administration)
The median annual cost of care for a private room in a Florida nursing center is $94,900*
The median annual cost for care for a private room in a Florida assisted living facility is $37,200.*
Nearly 40 percent of long term care spending is paid for by private funds.
Medicare, which covers rehabilitation services after an individual is discharged from a hospital, pays for 19 percent of all long term care spending.
Medicaid, which covers health care costs for low-income individuals, pays for approximately 60 percent of all long-term care spending.
Accounting for about 40 percent of total expenditures on nursing centers, Medicaid’s payments cover the care of more than half of all nursing home residents.
Medicare patients have short rehabilitative stays – 33 days average
Medicaid and private pay patients have long lengths of stay – 386 days average
Florida has one of the lowest over-65 population to nursing home population ratio in the country

Quality Trends

Kaiser Family Foundation Report: Florida is a Leader in Nursing Home Staffing
Florida centers staff Above the National Average – 4.6 hours per patient per day
Florida nursing centers rank 8th in total reported Certified Nursing Assistant (CNA) hours per patient per day
Florida nursing centers rank 12th for total reported Nurse staffing hours per patient per day
Since 2001, staffing in Florida nursing centers has increased from 1.6 to 2.6 CNA-to-Resident hours per day

According to the Florida Agency for Health Care Administration…

Economic Role of Long Term Care Facilities in Florida

Support an estimated $20.2 billion (2.7%) of Florida’s economy
Contribute to nearly 259,250 jobs and support $9.1 billion in labor income through employment of both direct caregivers and support staff (i.e, food service, maintenance, social workers)
Generate over $2.3 million in state and federal tax revenue
Long term care centers contribute to other businesses through a ripple effect, with each nursing home job resulting in two additional jobs or nearly $5 of added economic activity within a local community.

Future Needs for Long Term Care

2017 Profile of Older Americans, Administration for Community Living/Administration on Aging (April 2018)
By 2026, the population of Americans ages 65 and older will double to 71.5 million.
Between 2007 and 2015, the number of Americans ages 85 and older is expected to increase by 40 percent.
Among people turning 65 today, 69 percent will need some form of long-term care, whether in the community or in a residential care facility.
By 2020, 12 million older Americans will need long term health care. (HIAA, “A Guide to Long-Term Care Insurance”, 2002)

Above information provided by the Florida Healthcare Association.

Four Reasons Why Giving Your Home to Your Children Isn’t the Best Way to Protect It From Medicaid

Protect your home from State of Florida Medicaid estate recovery and the nursing home with an experienced elder law attorney and Medicaid planning, perhaps with a lady bird deed You may be afraid of losing your house to the nursing home, the State, or otherwise, if you must enter a nursing home and apply for Medicaid benefits to pay for the nursing home. While this fear may be well-founded in the vast majority of states, transferring the home to your children is usually not the best way to protect it, and that’s especially true in Florida.

Although you generally do not have to sell your home in order to qualify for Medicaid coverage of nursing home care, the state could file a claim in your probate estate against the house after you die. If you get help from Medicaid to pay for the nursing home, the state must attempt to recoup from your estate whatever benefits it paid for your care. This is called Medicaid “estate recovery.” If you want to protect your home from Medicaid estate recovery, you may be tempted to give it to your children. In Florida, that could be a costly mistake. Even for states other than Florida, there are at least three reasons not to transfer your home to your children.

Reason No. 1: Florida Homestead Protection.

The first reason you probably will not want to transfer your home to your children in Florida, is that in Florida your homestead property is protected from claims of creditors, including Medicaid estate recovery. The Florida Constitution specifically provides that creditors (including Medicaid) cannot attach a lien to your homestead property. In Florida, even if you go into a nursing home, there is a presumption that you have an “intent to return” to your homestead property which continues the protection from creditors even if you move into a nursing home. Medicaid estate recovery, therefore, is not an issue in Florida for your homestead property, so long as it retains its homestead character.

The homestead protection from creditors continues through the probate estate in Florida, unless you have no legal heirs at the time of your death. “Legal heirs” are defined in the Florida Statutes, Chapter 732. If there is a chance that you won’t have legal heirs, or if you want certain specified heirs to receive your homestead property at your death, an enhanced life estate deed (sometimes called a “lady bird” deed), can be used to provide for the automatic transfer of your homestead immediately upon your death. The transfer of the ownership of the home will not be subject to probate or to the claims of your creditors (including the State of Florida Medicaid estate recovery). Florida is one of just a few states that recognize the enhanced life estate deed. The transfer by an enhanced life estate deed also avoids the other three reasons for not transferring your home to your children that are listed below.

Reason No. 2: Medicaid ineligibility.

Most people do not realize that transferring your house to your children (or someone else) may make you ineligible for Medicaid for a period of time. The Florida Medicaid agency looks at any transfers made within five years of the Medicaid application. If you made a transfer for less than market value within that time period, the Florida Medicaid agency will impose a penalty period during which you will not be eligible for any Medicaid benefits. Depending on the house’s value, the period of Medicaid ineligibility could stretch for years. The right to receive Medicaid benefits would not begin until the Medicaid applicant has almost completely spent down all of their money and other assets.

There are certain circumstances which can allow you to transfer a home without penalty. You should consult a qualified and experienced elder law attorney before making any transfers. The exceptions that might allow you may freely transfer your home to the following individuals without incurring a transfer penalty include:

(a) to your spouse;

(b) to a child who is under age 21 or who is blind or disabled;

(c) into a trust for the sole benefit of a disabled individual under age 65 (even if the trust is for the benefit of the Medicaid applicant, under certain circumstances);

(d) a sibling who has lived in the home during the year preceding the applicant’s institutionalization and who already holds an equity interest in the home;

(e) a “caretaker child,” who is defined as a child of the person applying for Medicaid benefits, who lived in the house for at least two years prior to the applicant’s institutionalization in a nursing home, and who during that period provided care that allowed the applicant to avoid or delay moving into a nursing home stay.

Reason No. 3: Loss of Control.

In addition to the potential loss of Medicaid benefits to pay for nursing home care caused by a transfer to your children, after transferring your house to your children, you will no longer own the house. That means you will not have control of it. Your children can do what they want with the house. In addition, if your children are sued or get divorced or die, the house will be vulnerable to their creditors.

Reason No. 4: Adverse Tax Consequences.

Adverse tax consequences. Inherited property receives a “step up” in tax basis when you die, which means the tax basis is the current value of the property. However, when you give property to a child, the tax basis for the property is the same price that you purchased the property for. If your child sells the house after you die, he or she would have to pay capital gains taxes on the difference between the tax basis and the selling price. The only way to avoid some or all of the tax is for the child to live in the house for at least two years before selling it. In that case, the child can exclude up to $250,000 ($500,000 for a couple) of capital gains from taxes.

There are several other ways to protect your house, and other assets, from Medicaid estate recovery, including putting the home in a trust. To find out the best option for your circumstances, consult with an experienced elder law attorney. We can help you make the best decision for your family and circumstances, preserve the value of your home for your loved ones, and otherwise help you qualify for Medicaid benefits to pay for your nursing home stay. Call us and schedule an appointment to see how we can help you.

What Financial Protections Are Available for My Spouse When I Enter a Nursing Home and Receive Medicaid Benefits?

medicaid planning attorney lawyer in Jacksonville, Florida to assist with obtaining Medicaid benefits for nursing home care Often our clients seeking Medicaid benefits to help pay for nursing home care, or other long term care, are concerned about financial protections available to the stay at home spouse. They want to know how many assets or how much income the healthy spouse will be allowed to keep to ensure the financial well-being of the non-Medicaid spouse. Medicaid rules allow the healthy spouse to retain a certain level of assets, as well as provide for the healthy spouse to receive sufficient income, to maintain basic financial protections for the healthy spouse.

Medicaid Protections for Financial Assets for the Healthy Spouse

Medicaid law provides special protections for the spouses of Medicaid applicants to make sure the spouses have the minimum support needed to continue to live in the community while their husband or wife is receiving long-term care Medicaid benefits, usually in a nursing home.

One of the most important protections is the “community spouse resource allowance” or CSRA. It works this way: if the Medicaid applicant is married, the countable assets of both the community spouse and the institutionalized spouse are totaled as of the date of “institutionalization,” the day on which the ill spouse enters either a hospital or a long-term care facility in which he or she then stays for at least 30 days. (This is sometimes called the “snapshot” date because Medicaid is taking a picture of the couple’s assets as of this date.)

In order to be eligible for Medicaid benefits a nursing home resident may have no more than $2,000 in assets (an amount may be somewhat higher in some states). In general, the community spouse may keep one-half of the couple’s total “countable” assets up to a maximum of $123,600 (in 2018). This is the community spouse resource allowance (CSRA), the most that a state may allow a community spouse to retain without a hearing or a court order. The least that a state may allow a community spouse to retain is $24,720 (in 2018).

Example: If a couple has $100,000 in countable assets on the date the applicant enters a nursing home, he or she will be eligible for Medicaid once the couple’s assets have been reduced to a combined figure of $52,000 — $2,000 for the applicant and $50,000 for the community spouse.

Some states, including Florida, however, are more generous toward the community spouse. In these states, the community spouse may keep up to $123,600 (in 2018), regardless of whether or not this represents half the couple’s assets. For example, if the couple had $100,000 in countable assets on the “snapshot” date, the community spouse could keep the entire amount, instead of being limited to half.

Medicaid Income Protection for the Healthy Spouse

Although Medicaid limits the assets that the spouse of a Medicaid applicant can retain, the income of the “community spouse” is not counted in determining the Medicaid applicant’s eligibility. Only income in the applicant’s name is counted. Thus, even if the community spouse is still working and earning, say, $5,000 a month, she will not have to contribute to the cost of caring for her spouse in a nursing home if he is covered by Medicaid. In some states, however (not including Florida), if the community spouse’s income exceeds certain levels, he or she does have to make a monetary contribution towards the cost of the institutionalized spouse’s care. The community spouse’s income is not considered in determining eligibility, but there is a subsequent contribution requirement.

But what if most of the couple’s income is in the name of the institutionalized spouse and the community spouse’s income is not enough to live on? In such cases, the community spouse is entitled to some or all of the monthly income of the institutionalized spouse. How much the community spouse is entitled to depends on what the local Medicaid agency determines to be a minimum income level for the community spouse. This figure, known as the minimum monthly maintenance needs allowance or MMMNA, is calculated for each community spouse according to a complicated formula based on his or her housing costs. The MMMNA may range from a low of $2,030 to a high of $3,090 a month (in 2018). If the community spouse’s own income falls below his or her MMMNA, the shortfall is made up from the nursing home spouse’s income.

Example: Joe and Sally Smith have a joint income of $2,400 a month, $1,700 of which is in Mr. Smith’s name and $700 is in Ms. Smith’s name. Mr. Smith enters a nursing home and applies for Medicaid. The Medicaid agency determines that Ms. Smith’s MMMNA is $2,000 (based on her housing costs). Since Ms. Smith’s own income is only $700 a month, the Medicaid agency allocates $1,300 of Mr. Smith’s income to her support. Since Mr. Smith also may keep a $105-a-month personal needs allowance, his obligation to pay the nursing home is only $295 a month ($1,700 – $1,300 – $105 = $295).

In exceptional circumstances, community spouses may seek an increase in their MMMNAs either by appealing to the state Medicaid agency or by obtaining a court order of spousal support. Your elder law attorney can explain these options to you.

Medicaid Exempt Assets

Medicaid also provides for certain assets to be exempt, or non-countable resources. Exempt assets vary from state to state. In Florida, exempt assets include the homestead that is used as the primary residence of the community spouse; an automobile, certain types of real estate, and other assets with special circumstances. The exempt assets are not counted in determining Medicaid eligibility, and typically the stay at home spouse can retain these assets to provide financial support for him or her.

Conclusion

There are many financial protections built into the Medicaid rules and statutes that help to ensure the community spouse who remains in the home has sufficient assets and income to avoid impoverishment. We can help you determine what assets are exempt and can be retained, as well as how many other assets can be protected from nursing home spend down, and how to ensure that the healthy spouse has the maximum income allowed by law.

If you, your spouse or loved one, needs only a Qualified Income Trust to qualify for Medicaid benefits to help pay for nursing home care, you can prepare a qualified income trust, online, by clicking this button:

Prepare My QIT Now - Click Here

Home Health Care Patients With Chronic Conditions Are Having Trouble Getting Medicare

Medicare is supposed to provide up to 35 hours a week of home care to those who qualify, but many Medicare patients with chronic conditions are being wrongly denied such care, according to Kaiser Health News. For a variety of reasons, many home health care agencies are simply telling patients they are not covered.

Medicare is mandated to cover home health benefits indefinitely. In addition, Medicare is required to cover skilled nursing and home care even if a patient has a chronic condition. Unfortunately, many home health providers are not aware of the law and tell home health care patients that they must show improvement in order to receive benefits.

According to a Kaiser Health News article, confusion over whether or not improvement is required (it is not) is one part of the problem. Another issue is that home health care workers are afraid they will not get paid if they take on long-term care patients. In an effort to crack down on fraud, Medicare is more likely to audit providers who provide long-term care. This encourages providers to favor patients who need short-term care.

If you are a Medicare beneficiary receiving skilled care for a chronic condition, you no longer have to show improvement in order to have the care covered, but your provider (such as a doctor, home care agency, or nursing home) may not know this. Even though a recent lawsuit settlement mandated a nationwide educational campaign for providers, many are still refusing to provide needed treatment, claiming that Medicare will not cover it.

For about 30 years, home health agencies and nursing homes that contract with Medicare have routinely terminated the Medicare coverage of a beneficiary who has stopped improving, even though nothing in the Medicare statute or its regulations says improvement is required for continued skilled care. Under a settlement agreement in Jimmo v. Sebelius, the federal government agreed to update Medicare rules to require that Medicare cover skilled care as long as the beneficiary needs skilled care, even if it would simply maintain the beneficiary’s current condition or slow further deterioration.

The policy shift affects beneficiaries with conditions like multiple sclerosis, Alzheimer’s disease, Parkinson’s disease, ALS (Lou Gehrig’s disease), diabetes, hypertension, arthritis, heart disease, and stroke. In addition, under the settlement Medicare beneficiaries who received a final denial of Medicare coverage after January 18, 2011 (the date the lawsuit was filed) are entitled to a review of their claim denial.

In addition, Medicare’s Home Health Compare ratings website may be having a negative effect on home health care agencies’ willingness to provide for long-term care patients. One measure of care qualification is whether a patient is improving. Because patients with chronic conditions don’t necessarily improve, they could lower an agency’s rating. Also, under a rule that just went into effect, home health care agencies cannot dismiss a patient without a doctor’s note. This may make agencies even more reluctant to take on long-term care patients.

The government launched an educational campaign in January 2018 to explain the settlement and the new rules to Medicare providers like home care agencies and nursing homes, but according to a Reuters article, many providers remain unaware of what is covered or how to bill Medicare for the services. The campaign was not aimed at beneficiaries, so not all Medicare beneficiaries are aware of the rules and that they can fight a denial of coverage.

Reuters focuses on one beneficiary, Robert Kleiber, 78, who receives weekly visits from a physical therapist to alleviate symptoms of his Parkinson’s disease. Kleiber’s wife recently learned that the treatments should be covered under Medicare’s new rules but so far she has been unable to convince the home health care provider of this.

If you experience problems with a Medicare provider, the Center for Medicare Advocacy has several self-help packets explaining how to appeal improvement standard denials.

For the Reuters article, click here.

National Long-Term Care Spending Hits All-Time High at $163 Billion

Medicaid planning with Jacksonville Medicaid planning attorney in Florida Americans spent nearly $163 billion for long-term care in skilled nursing facilities and continuing care retirement communities (CCRC) in 2016, according to a recent U.S. Government report.

The Centers for Medicare & Medicaid Services’ National Health Care Spending report for 2016, published December 27, 2017, in Health Affairs, found that total healthcare spending in the United States increased 4.3% in 2016, reaching $3.3 trillion.

When it comes to long-term care, $162.7 billion was spent last calendar year. That marks the highest point in total nursing care and CCRC spending to date, compared to $140.5 billion in 2010. The annual growth rate for nursing care facilities and CCRCs hit 2.9% for 2016, down from 3.7% the prior year.

All Medicaid-related goods and services experienced slower growth in 2016 than in previous year, except for nursing homes and CCRCs, according to the report. Total Medicaid expenditures for 2016 increased 3.9% to reach $565.5 billion. In total, Medicaid spending made up 17% of the nation’s total health expenditures for last year.

Medicare spending made up 20% of total healthcare spending in 2016, at $672.1 billion. Medicare fee-for-service spending growth slowed down in 2016, due in part to declines in spending on long-term care in nursing homes, the report found. That drop in Medicare spending for long-term care was driven by a lower use of services and a smaller increase in the Medicare reimbursement rate.

The overall slower growth of healthcare spending in the U.S. in 2016 is likely due to a deceleration of the “major changes” experienced by the industry in previous years, such as provisions of the Affordable Care Act that expanded insurance options. For that reason, 2016 may mark “a return to the more typical relationship between annual rates of growth in healthcare spending and growth in nominal GDP,” researchers wrote.

A recent report from Health Affairs projected long-term care spending to continue to climb over the next decade, driven by the rapidly aging U.S. population. That report predicted that nursing facilities and CCRC spending would grow at an average rate of 5.2% per year until 2024, reaching $274 billion in total spending.

If you need assistance with qualifying for Medicaid to pay for long-term care in a skilled nursing facility, we can help. Call 904-448-1969 to schedule an appointment to discuss how to get you or your loved one qualified for Medicaid benefits to pay for long-term care while preserving as many family assets as allowed by law.

Social Security Income to Increase in 2018, But Offset by Medicare Premium Increase

In 2018, Social Security recipients will get their largest cost of living increase in benefits since 2012, but the additional income will likely be largely eaten up by higher Medicare Part B premiums.

Cost of living increases are tied to the consumer price index, and an upturn in inflation rates and gas prices means recipients get a small boost in 2018, amounting to $27 a month for the typical retiree. The 2 percent increase is higher than last year’s .3 percent rise and the lack of any increase at all in 2016. The cost of living change also affects the maximum amount of earnings subject to the Social Security tax, which will grow from $127,200 to $128,700.

The increase in benefits will likely be consumed by higher Medicare premiums, however. Most elderly and disabled people have their Medicare Part B premiums deducted from their monthly Social Security checks. For these individuals, if Social Security benefits don’t rise, Medicare premiums can’t either. This “hold harmless” provision does not apply to about 30 percent of Medicare beneficiaries: those enrolled in Medicare but who are not yet receiving Social Security, new Medicare beneficiaries, seniors earning more than $85,000 a year, and “dual eligibles” who get both Medicare and Medicaid benefits. In the past few years, Medicare beneficiaries not subject to the hold harmless provision have been paying higher Medicare premiums while Medicare premiums for those in the hold harmless group remained more or less the same. Now that seniors will be getting an increase in Social Security payments, Medicare will likely hike premiums for the seniors in the hold harmless group. And that increase may eat up the entire raise, at least for some beneficiaries.

For 2018, the monthly federal Supplemental Security Income (SSI) payment standard will be $750 for an individual and $1,125 for a couple.

For more on the 2018 Social Security benefit levels, click here.

If we can help you understand your Social Security benefits, please call to schedule an appointment.

Don’t Let Health Care Providers Use the Improvement Standard to Deny Medicare Coverage

elder law attorney to help obtain medicare benefits at nursing homes for long term care Have you or a loved one been denied Medicare-covered services because you’re “not improving” or “not making progress”? Many health care providers are still not aware that Medicare is required to cover skilled nursing and home care even if a patient is not showing improvement. If you are denied coverage based on this outdated standard, you have the right to appeal.

For decades Medicare, skilled nursing facilities, and visiting nurse associations applied the so-called “improvement” standard to determine whether residents were entitled to Medicare coverage of the care. The standard, which is not in Medicare law, only permitted coverage if the skilled treatment was deemed to contribute to improving the patient’s condition, which can be difficult to achieve for many ill seniors.

Three years ago in the case of Jimmo v. Sebelius the Centers for Medicare & Medicaid Services (CMS) agreed to a settlement in which it acknowledged that there’s no legal basis to the “improvement” standard and that both inpatient skilled nursing care and outpatient home care and therapy may be covered under Medicare as long as the treatment helps the patient maintain her current status or simply delays or slows her decline. In other words, as long as the patient benefits from the skilled care, which can include nursing care or physical, occupational, or speech therapy, then the patient is entitled to Medicare coverage.

Medicare will cover up to 100 days of care in a skilled nursing facility following an inpatient hospital stay of at least three days and will cover home-based care indefinitely if the patient is homebound.

Unfortunately, despite the Jimmo settlement, the word hasn’t gotten out entirely to the hospitals, visiting nursing associations, skilled nursing facilities, and insurance intermediaries that actually apply the rules. As a result, the Jimmo plaintiffs and CMS have now agreed to a court-ordered corrective action plan, which includes the following statement:

The Centers for Medicare & Medicaid Services (CMS) reminds the Medicare community of the JimmoSettlement Agreement (January 2014), which clarified that the Medicare program covers skilled nursing care and skilled therapy services under Medicare’s skilled nursing facility, home health, and outpatient therapy benefits when a beneficiary needs skilled care in order to maintain function or to prevent or slow decline or deterioration (provided all other coverage criteria are met). Specifically, the Jimmo Settlement required manual revisions to restate a “maintenance coverage standard” for both skilled nursing and therapy services under these benefits:

Skilled nursing services would be covered where such skilled nursing services are necessary to maintain the patient’s current condition or prevent or slow further deterioration so long as the beneficiary requires skilled care for the services to be safely and effectively provided.

Skilled therapy services are covered when an individualized assessment of the patient’s clinical condition demonstrates that the specialized judgment, knowledge, and skills of a qualified therapist (“skilled care”) are necessary for the performance of a safe and effective maintenance program. Such a maintenance program to maintain the patient’s current condition or to prevent or slow further deterioration is covered so long as the beneficiary requires skilled care for the safe and effective performance of the program.

The Jimmo Settlement may reflect a change in practice for those providers, adjudicators, and contractors who may have erroneously believed that the Medicare program covers nursing and therapy services under these benefits only when a beneficiary is expected to improve. The Settlement is consistent with the Medicare program’s regulations governing maintenance nursing and therapy in skilled nursing facilities, home health services, and outpatient therapy (physical, occupational, and speech) and nursing and therapy in inpatient rehabilitation hospitals for beneficiaries who need the level of care that such hospitals provide

“The CMS Corrective Statement is intended to make it absolutely clear that Medicare coverage can be available for skilled therapy and nursing that is needed to maintain an individual’s condition or slow deterioration,” says Judith Stein, Executive Director of the Center for Medicare Advocacy and a counsel for the plaintiffs. “We are hopeful this will truly advance access to Medicare and necessary care for people with long-term and debilitating conditions.”

While this doesn’t change the rights Medicare patients have always had, it should make it somewhat easier to enforce them. If you or a loved one gets denied coverage because the patient is not “improving,” then appeal.

To read the court order implementing the new corrective action plan, click here.

If you need an advocate to assist you with obtaining compliance from nursing homes with the court ruling in Jimmo, or with planning to obtain Medicaid benefits without losing all of the assets you’ve taken a lifetime to accumulate, call us, we can help.

Use of Immediate Annuities in Medicaid Planning for Married Couples

immediate annuities Medicaid planning, elder law attorney medicaid planning lawyer in jacksonville florida Immediate annuities can be a useful tool to protect the spouse of a nursing home resident who applies for Medicaid. These types of annuities allow the nursing home resident to spend down assets and give the spouse a guaranteed income. Immediate annuities are an available planning tool in the State of Florida.

Medicaid is the primary source of payment for long-term care services in the United States. To qualify for Medicaid, a nursing home resident must become impoverished under Medicaid’s complicated asset rules. In most states, this means the applicant can have only $2,000 in “countable” assets. Virtually everything is countable except for the home (with some limitations) and personal belongings. The spouse of a nursing home resident–called the “community spouse” — is limited to one half of the couple’s joint assets up to $120,900 (in 2017) in “countable” assets. The least that a state may allow a community spouse to retain is $24,180 (in 2017). While a nursing home resident must pay his or her excess income to the nursing home, there is no limit on the amount of income a spouse can have.

An immediate annuity is a contract with an insurance company under which the annuitant pays the insurance company a sum of money in exchange for a stream of income. This income stream may be payable for life or for a specific number of years, or a combination of both — i.e., for life with a certain number of years of payment guaranteed. In the Medicaid planning context, most annuities are for a specific number of years.

The spouse of a nursing home resident may spend down his or her excess assets by using them to purchase an immediate annuity. But if Medicaid applicants or their spouses transfer assets within five years of applying for Medicaid, the applicants may be subject to a period of ineligibility, also called a transfer penalty. To avoid a transfer penalty, the annuity must meet the following criteria:

The annuity must pay back the entire investment. When interest rates were higher, it was possible to purchase annuities for as short as two years, but now short annuities usually don’t pay back the full purchase price.
The payment period must be shorter than the owner’s actuarial life expectancy. For instance, if the spouse’s life expectancy is only four years, the purchase of an annuity with a five-year payback period would be deemed a transfer of assets.
The annuity must be irrevocable and nontransferable, meaning that the owner may not have the option of cashing it out and selling it to a third party.
The annuity has to name the state of Florida as the beneficiary if the annuitant dies before all the payments have been made.

Here’s an example of how an immediate annuity might work: John and Jane live in a state that allows the community spouse to keep $120,900 of the couple’s assets. If John moves to a nursing home and John and Jane have $320,000 in countable assets (savings, investments, and retirement accounts), Jane can take $200,000 in excess assets and purchase an immediate annuity for her own benefit. After reducing their countable assets to $120,000, John will be eligible for Medicaid. If the annuity pays her $3,500 a month for five years, by the end of that time, Jane will have received back her investment plus $10,000 of income. If she accumulates these funds, at the end of five years she will be right back where she started before John needed nursing home care.

Given this planning opportunity, many spouses of nursing home residents use immediate annuities to preserve their own financial security. But it’s not a slam-dunk for a number of reasons, including:

Some states, other than Florida, either do not allow spousal annuities or put additional restrictions on them.
Other planning options may be preferable, such as spending down assets in a way that preserves them, transferring assets to exempt beneficiaries or into trust for their benefit, seeking an increased resource allowance, purchasing non-countable assets, using spousal refusal, or bringing the nursing home spouse home and qualifying for community Medicaid.
The purchase of an annuity might require the liquidation of IRAs owned by the nursing home spouse, causing a large tax liability.
The non-nursing home spouse may be ill herself, meaning that she may need nursing home care soon, in which case the annuity payments would simply go to her nursing home.
The savings may be small due to a high income or the short life expectancy of the nursing home spouse, and the process of liquidating assets and applying for Medicaid might not be worth the considerable trouble.

In short, the use of this powerful planning strategy depends on each couple’s particular circumstances and should be undertaken only after consultation with a qualified elder law attorney. In addition, those who do purchase immediate annuities need to shop around to make sure they are purchasing them from reliable companies paying the best return.

Finally, couples need to beware of deferred annuities. Some brokers will attempt to sell deferred annuities for Medicaid planning purposes, but these can cause problems. While a deferred annuity can be “annuitized” (meaning it can be turned into an immediate annuity), if the nursing home resident owns the annuity, the income stream will be payable to the nursing home instead of to the healthy spouse. Often, the annuity will charge a penalty for early withdrawal, so it is difficult to transfer it to the healthy spouse. In short, while immediate annuities can be great tools for Medicaid planning, deferred annuities should be avoided by anyone contemplating the need for long term care in the near future.

We can help you determine whether an immediate annuity will be beneficial for you and your spouse.

Differences between Lifetime and Deathtime Planning… Why a Comprehensive Estate Plan Must Include Both

According to a March 2017 survey by Caring.com, six out of ten Americans have no will or any other kind of estate planning. Many said they’d get around to it, eventually. When they’re old. (The survey did find that the elderly are much more likely to have some plan in place.) It’s all too clear that most of us think “estate planning” is a euphemism for “deathtime” planning. Indeed, in the Caring.com survey, one-third said that they didn’t need an estate plan because they didn’t have any assets to give someone when they’d died.

However, comprehensive estate planning isn’t just deathtime planning. It’s lifetime planning, too. It’s about ensuring that your medical and financial decisions can be made by someone that you trust when you are unable to make those decision for yourself. Lifetime planning can help you address potential tax liabilities, find you benefit programs you may eligible for, and protect your family from costly guardianship or conservatorship court. It can make sure that a trusted party looks after and protects your affairs, if and when you’re not able to.

Lifetime Planning Tools

As estate planners, we have an arsenal of lifetime planning tools to benefit our clients, and we custom-tailor such plans to meet each individual’s needs. Here are a couple of the most common (and necessary) lifetime planning tools you should discuss with us.

Revocable living trusts

When people hear the word “trust,” they may think of “trust fund babies” or think that trusts are something only for the super-rich.

However, a trust is simply a legal tool that can help almost anyone with property – not just the wealthy. In a trust, assets you own are re-titled and transferred into the trust. When this happens, technically, you no longer own your real estate, stocks, bonds and similar properties. Instead, the trust owns them all. But you still control everything in the trust: You can buy and sell these assets as if they were still in your name. In fact, revocable living trusts don’t even change your income taxes while you’re alive. You continue to file your tax returns as you always have, making them very easy to administer while you’re alive. As the creator (grantor or settlor) of the trust, you can continue to make changes to the trust as long as you’re competent to do so.

When you die, the trust becomes irrevocable, meaning its terms can’t generally be changed. At this point, your chosen successor trustee distributes assets to beneficiaries (the people, such as your spouse, children, a church, or other charity, you named to inherit from you). In many respects, the role of the trustee is similar to that of the executor of a will. But, a trustee of a fully funded trust doesn’t have to go through the both public and expensive probate process. Trusts are private, unlike wills, which can also provide valuable privacy to your family and ultimately help preserve your assets for the people you want to benefit from your estate.

Durable power of attorney

Durable powers of attorney come in two forms. With a standard durable power of attorney, a person is legally designated to act on your behalf, in the ways specified in the document. You can make the durable power of attorney broad in scope or quite limited, and it becomes active as soon as you sign it. Under this document, the person may sign checks for you, enter contracts on your behalf, even buy or sell your assets. What they can do depends on what you authorized in the document.

For those who ultimately may need long term care, having a durable power of attorney in place before the need for the long term care arises, can allow for eligibility for Medicaid benefits that otherwise may be beyond reach of the incapacitated person. If the power of attorney is not already in place when dementia or Alzheimer’s Disease, or other debilitating diseases arise, the lack of a durable power of attorney could cost your family thousands of dollars a month. A properly drafted and signed power of attorney can bring those funds back to the family – legally and ethically.

In the case of a “springing” power of attorney (POA), also known as a conditional power of attorney, the person only has this authority if you become incapacitated. At that point, the POA “springs” into action. Florida law does not allow the use of springing powers of attorney any longer, but those signed prior to October 1, 2011 are deemed to be legally effective. However, there is no statutory basis for forcing a third party to honor a power of attorney signed before October 1, 2011, so if you have such a power of attorney you may want to seriously consider having it updated to comply with the statute that became effective on that date.

There is no “best” power of attorney. We’ll work with you to determine which is the best fit for your needs and goals.

Health Care Power of Attorney

In an instant, an accident can change a healthy, vigorous person into someone who can’t make her healthcare decisions. Others face a long decline in mental capacity because of a disease like Alzheimer’s. In either case, you want to empower those you trust to make medical decisions for you. Though health care legal documents vary somewhat by state, the general principle is that, through this document, you authorize someone to make medical decisions for you, if and when you no longer have the capacity to do so. You can also communicate your desired treatment and end-of-life care. However, those instructions may not be valid in every state.

A Holistic Approach

Lifetime planning is a comprehensive approach to estate planning. And while it addresses needs of the living, comprehensive planning may also improve the after-death part of your plan as well, because it can reduce family conflict and preserve assets against court control or interference in the event of incapacity.

Contact an Experienced Estate Planning Attorney

For insight into how to establish a trust, whether it be a revocable trust or an irrevocable trust, and implement other lifetime planning options, call us today to schedule a consultation.

Short-Term Care Insurance: An Alternative to the Long-Term Care Variety

cost of long term care from elder law attorney medicaid lawyer in jacksonville, florida A little-known insurance option can be an answer for some people who might need care but are unable to buy long-term care insurance. Short-term care insurance provides coverage for nursing home or home care for one year or less.

As long-term care premiums rise, short-term care insurance is gaining in popularity. This type of insurance is generally cheaper than its long-term care counterpart because it covers less time. Purchasers can choose the length of coverage they want, up to one year. According to the American Association for Long-Term Care Insurance a typical premium for a 65-year-old is $105 a month.

People who can’t qualify for long-term care insurance because of health reasons may be able to qualify for short-term care coverage. This kind of insurance doesn’t usually require a medical exam and sometimes only has a few medical questions on the application. Another benefit of short-term care insurance is that there usually is not a deductible. The policies begin paying immediately, without the waiting period usually found in long-term care policies.

Short-term care policies are not the answer for everyone. They may not cover all the levels of care that a long-term care policy would cover. As with any insurance product, buyers need to make sure that they understand what coverage they are purchasing. And these policies are not regulated to the same extent that long-term care insurance policies are, so there are fewer consumer protections.

Short-term care policies may be beneficial for individuals who waited too long to purchase long-term care insurance (short-term care can typically be purchased up to age 89). They can also help fill gaps in Medicare coverage or cover the deductible period before long-term care insurance begins paying. The policies may also be appealing to single women because there is no price difference for women and men, as there is for long-term care insurance.

Finally, the short-term care policy may be part of the answer to the waiting period that impacts many Floridians seeking Medicaid coverage under one of the waiver programs.

For more information about these policies from Forbes, click here.

For more information about planning for long-term care and obtain eligibility for Medicaid benefits to pay for long-term care, give our office a call to schedule a consultation. With nursing home costs exceeding $8,000 per month in most Florida locations, Medicaid may ultimately be the only possible way to provide for long term care. We can help.

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Prepare Your Florida QIT Right Here, Right Now

The irrevocable Florida qualified income trust, or "Miller Trust." that you can prepare online, for a fixed fee of $295. The trust document is reviewed by Florida elder law attorney C. Randolph Coleman. Mr. Coleman has been a practicing attorney and member of The Florida Bar for over 30 years.

If you would like a telephone consultation with Mr. Coleman, or an email consultation with him regarding the qualified income trust, you can purchase those services by clicking here for a telephone consultation, and by clicking here for an email consultation.

Mr. Coleman has focused exclusively on elder law in Florida and estate planning matters for the past 30+ years, and has prepared hundreds of qualified income trusts that have been accepted by the Florida Department of Children and Families (or its predecessor HRS) to allow elderly skilled nursing home residents to qualify for Medicaid benefits to pay for the skilled nursing home cost.

The qualified income trust that is prepared online is guaranteed to be accepted by DCAF or you will receive a full refund of your purchase.

Mr. Coleman is a member of The Florida Bar, Elder Law Section and the Real Property, Probate and Trust Law Section of The Florida Bar. He is rated by his professional peers AV (preeminent) by Martindale-Hubbell for 26 consecutive years, and has a 10.0 rating (Superb) by AVVO for estate planning and elder law matters.

He is a member of ElderCounsel, LLC, The National Association of Elder Law Attorneys, The Academy of Florida Elder Law Attorneys, the National Care Planning Council, and WealthCounsel, LLC.

When A Qualified Income Trust Is All You Need

Tag: long term care