Will I Lose My House If I Need Help from Medicaid?

Coral Gables Medicaid planning attorneys

Like many people, you may be concerned about the likelihood that you will need long-term care and the high cost of that care. Including a Medicaid planning component in your comprehensive estate plan can help. One concern you may have is that you will lose your home if you need to rely on Medicaid to pay for long-term care. With that in mind, the Coral Gables probate attorneys at Stivers Law explain whether the need to qualify for Medicaid threatens your home.

Why Might You Need to Qualify for Medicaid?

Medicaid is a federal healthcare program targeted at providing healthcare services to low-income individuals and families. As a senior, you might suddenly find yourself in a position where qualifying for Medicaid is your only hope with assistance covering the high cost of long-term care (LTC). Nationwide, residents paid, on average, over $100,000 for a year of LTC in 2022. What makes the high cost of LTC so alarming though is that neither Medicare nor most health insurance policies will cover LTC expenses. Unless you can afford to easily pay for LTC out of pocket, that leaves Medicaid as your only hope for help.

Medicaid Eligibility in Florida

While Medicaid will cover LTC expenses for program participants, you must qualify for the program. In Florida, you cannot have countable resources (assets) that exceed $2,000 if you apply as an individual or $3,000 if both spouses in a married couple apply. If you are married and only one spouse is applying, the applicant cannot have assets valued at over $2,000 while the non-applicant may have countable resources of up to $148,620 (as of 2023). If your assets exceed the limit, your application will be denied, and you will have to “spend-down” those assets until they fall below the limit. If you have considerable equity in your primary residence, you may be concerned given the low countable resources limit. The good news is that certain assets are exempt when considering eligibility for Medicaid in Florida, including, but not limited to:

  • Personal belongings
  • One automobile
  • Household goods and furniture
  • Burial expenses of up to $2,500
  • Life insurance (zero cash value) of up to $2,500

In addition, equity in your home is exempt when determining your countable resources up to the current equity limit if you intend to return to the home.

Medicaid Estate Recovery Program

Unfortunately, the analysis does not stop with Medicaid eligibility. While the equity in your home is usually not at risk when applying for Medicaid, it can be at risk after your death if Medicaid paid for LTC while you were alive. The Medicaid Estate Recovery Program (MERP) allows the state to file a claim against a decedent’s estate if Medicaid paid for LTC while the decedent was alive. In other words, your house could still be at risk after you are gone.

How To Protect Your House

The key to protecting the equity in your home when you apply for Medicaid as well as from a claim made by MERP is to include a Medicaid planning component in your estate plan. There are several legal tools and strategies, such as creating a Medicaid trust, that can be utilized to protect your assets while setting you up for Medicaid eligibility down the road. For these tools to protect your home, however, you need to have a plan in place long before you apply for Medicaid. Talk to your estate planning attorney about how to incorporate Medicaid planning into your estate plan.

Contact Coral Gables Medicaid Planning Attorneys

For more information, please join us for an upcoming FREE webinar. If you have additional questions or concerns about Medicaid, contact the experienced Coral Gables Medicaid planning attorneys at Stivers Law by calling (305) 456-3255 to schedule an appointment.

Author Bio

Justin Stivers is the founder and managing attorney of Stivers Law, an estate planning firm specializing in wills, probate, trust administration, and financial risk management services. Justin’s approach goes beyond just creating legal documents. From aligning investments with estate plans to ensuring comprehensive insurance coverage, he safeguards a client’s legacy from unforeseen circumstances. His commitment extends beyond individual transactions, fostering lifelong partnerships to provide ongoing support and guidance.

With an impressive track record, Justin is licensed by the Florida and the Tennessee State Bars. His professional portfolio boasts Series 65 registration as a Registered Investment Advisor, the Wealth Management Specialist™ designation, and a 2-15 License for Health, Life, and Annuities. His dedication to excellence has earned him positions like Board Member of the Estate Planning Council of Greater Miami, Business Eagle Member of the Florida Justice Association, and active membership in esteemed organizations like the American Academy of Estate Planning Attorneys.

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