Medicaid Estate Recovery Program
Medicaid planning should be an integral part of the average estate plan. Understanding why you need a Medicaid planning component in your estate plan will help ensure that you include one in your plan. In addition, you need to understand how the Medicaid Estate Recovery Program could impact your estate after your death so you can plan accordingly. Toward that end, a Coral Gables Medicaid planning attorney at Stivers Law explains what you need to know about the Florida Medicaid Estate Recovery Program.
Why You Might Need to Qualify for Medicaid
At some point during your retirement years, either you or your spouse may need long-term care (LTC). The average cost of LTC nationwide was just over $100,000 for 2021. Florida residents can expect to pay, on average, slightly more than the national average at close to $115,000 per year for 2021 Since neither Medicare nor most basic health insurance policies will pay for LTC, Medicaid may be the only option for help with LTC expenses unless you can afford to pay out of pocket.
Along with basic eligibility requirements such as residency, qualifying for Medicaid depends on your income and assets. To qualify, the value of your “countable resources” must fall below the program’s limit which is as low as $2,000 for an individual. If your resources are valued more than the limit when you apply, your application will be denied, and you may be required to “spend-down” your resources before being eligible for benefits. Understandably, the need to reduce countable resources to avoid the need to “spend-down” assets is what most people focus on when they are working on a Medicaid plan. While it is crucial to anticipate the need to qualify for Medicaid while you are alive when creating your estate plan, it is also important to think about how Medicaid could impact your estate after you are gone.
The Florida Medicaid Estate Recovery Program (MERP)
The purpose of MERP is to allow the individual states to try and recover some of the funds they spend on Medicaid recipients by filing a claim against the estate after the recipient’s death. In Florida, the Florida Estate Recovery Act (Florida Statute 409.9101) governs the MERP program. That law applies to those Medicaid recipients who have received services at any time on or after August 31, 1993, and who were 55 years of age or older at the time of provision of the service.
What MERP Can and Cannot Take
After a Medicaid recipient passes away, creditors of the estate must be notified during the probate of the estate. Medicaid is considered a creditor. The MERP rules allow Medicaid to file a claim against the estate. There are, however, exemptions and limitations that apply to what MERP can and cannot take from your estate. For example, the state will not pursue a claim against your estate if you are survived by any of the following:
- A spouse
- A child under the age of 21
- A child who is deemed permanently disabled by social-security standards
- A child who is blind.
In addition, MERP cannot take property that is considered exempt from creditors, such as your homestead and will not pursue recovery if doing so would create an “undue hardship” for qualified heirs. The undue hardship exemption is essentially a “catch all” for situations not covered directly by another exemption or limitation; however, if your heirs claim undue hardship they will need to support that claim.
Contact Our Coral Gables Medicaid Planning Attorneys
For more information, please join us for an upcoming FREE webinar. If you have additional questions or concerns about the Florida Medicaid Estate Recovery Program or about Medicaid planning in general, contact an experienced Coral Gables Medicaid planning attorney at Stivers Law by calling (305) 456-3255 to schedule an appointment.
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