This week’s topic arises in the fast moving climate of today’s Medicaid world. You may or may not be aware that in Florida Medicaid Programs evolved in 2014 with the onset of Medicaid Managed Care Programs and HCBS Programs which in a sense replaced earlier waiver programs. For traditional Medicaid as well as the Managed Care programs, using qualified income trusts for Florida Medicaid planning can a great planning option.
In a nutshell, the Managed Care and HCBS (Home and Community Based Settings) programs provide an alternative to folks who may be close to requiring full skilled nursing care, but still desire to remain at home or in an “assisted living” facility. These programs are in place to foster ongoing community involvement and a home environment for seniors.
What you may not know about these programs is that if your income level exceeds the limit for the alternative Managed Care or HCBS programs, you can use tools such as the Qualified Income Trust (QIT) in the same way that you would use them to qualified for traditional full skilled nursing care.
The “Income Limit” When Applying For Traditional Medicaid Benefits in Florida (“Full Skilled Nursing Care”) became $2,199.00 as of January 2016 and this Limit Also Generally Applies To Medicaid Managed Care and the HCBS Programs.
If One’s Income Exceeds The $2,199.00 Limit, A Great Planning Strategy Is Using Qualified Income Trusts for Florida Medicaid Planning.
Qualified income trusts for Florida Medicaid planning is a legal strategy that uses a Qualified Income Trust (“QIT”) that is designed for people who are over the minimum income limit. The legal reasoning for this strategy is that often folks do not have enough income to pay their cost of care each month even if they are technically over the Medicaid income limit.
For example, if someone’s income is $3000.00 per month (over the limit) and the cost of care each month is $4,000.00. Applying this example, the monthly income would go into the QIT, and the difference between the allowed minimum and the actual income would be paid to the care facility. This would allow the applicant to get qualified for Florida Medicaid benefits.
Qualified income trusts for Florida Medicaid planning must be set up and maintained properly to avoid disqualification from benefits.
Qualified income trusts for Florida Medicaid planning require proper administration and accounting to assure that income is not improperly taken from the trust. Also, it is important to understand what constitutes “income”‘ under the Medicaid rules. For Medicaid qualification purposes, we are talking about “gross income” and not “net income”.
Therefore, amounts such as health insurance premiums, other benefit programs, taxes and must be added back for this calculation. Virtually every type of income is counted as such and this could range from annuity income, to social security, pensions, interest income and even other non-taxable income.
The Qualified Income Trust (QIT) May Be Used To Qualify For Alternatives To Traditional Full Skilled Nursing Care (Medicaid) Such As Florida HCBS Programs.
The Home and Community Based Settings (HCBS) Programs in Florida, may allow those who would otherwise be eligible for Florida Medicaid and placed in a full skilled nursing facility, to receive paid services such as skilled nursing care at home. Even better, the same approach that is applied for traditional Medicaid can be taken to obtain qualification for HCBS programs and this includes the use of qualified income trusts for Florida Medicaid planning.
Herein is a great opportunity to provide optimal care for aging loved ones without the burden of “footing the bill” every month. Applying the “qualified income trusts for Florida Medicaid planning” strategy to other alternatives, such as HCBS programs, may offer a terrific solution for those who have made the difficult decision to care of aging loved ones at home rather than sending them to a nursing home. Also, folks who are in an assisted living facility and who are able and prefer to stay can often do so under these programs.
As always, all of this depends upon a full evaluation of the medical status of the applicant to determine the level of care that is ultimately needed. Also, remember that once someone passes the “income test”, it is time to pass the “asset test” this may involve taking a careful look at your overall Florida estate planning AND possibly downsizing your estate for Florida Medicaid planning purposes.
Steve Gibbs, Esq.
This article is an updated version of an original post dated June 6, 2o17.