Category Archives: Medicaid Planning

Ask Heidi: What is a Medicaid Spend-down?

A Medicaid Spend-Down is a process that allows you to legally spend down your assets in such a way so that you can legitimately qualify for Medicaid.

Why Shquestionmarkould You Care?

People are living much longer than they did in previous generations.  As a result of this, we are seeing a sharp increase in people who are needing home nursing care as well as long term care.  Many families have unfortunately had to take on the financial burden of these services which can cost well north of $5,000 a month.  This additional burden has ruined families not only financially, but also emotionally.  But many can breathe a sigh of relief because help is available from the government in the form of Medicaid.

Medicaid is a government program that was created to help struggling and low income families with healthcare costs [check out last week’s blog for more on Medicaid].  It is important to understand that in order to qualify for Medicaid you must meet specific income requirements and have limited assets.  If you exceed these limits but still need to have access to Medicaid an attorney may be able to help you find ways, such as a spend-down, to legitimately qualify by reducing your available income and assets.

It is very important to seek the advice of an attorney trained in Estate Planning or Elder Law to help you navigate the process of a Medicaid Spend-Down. It must be done in accordance with the laws and guidelines currently in place of YOUR State or the consequences could have a much greater financial impact.


ASK HEIDI: Medicare versus Medicaid

Welcome to the inaugural post of my new weekly series:  ASK HEIDI   Question-Mark

I find some questions pop up more than others and I will start the series answering THOSE questions, but going forward I hope folks will email, tweet, private message, or post questions on my Facebook and I will answer them anonymously on here.

To kick things off I thought I’d start with something that I think everyone under the age of 65 confuses:   Medicare versus Medicaid.  The names are so similar they beg confusion, however, Medicare and Medicaid are very different. Granted, both are kinds of health insurance offered through government entities, but they have extremely different eligibility requirements, provide different levels of coverage and when planning ahead it’s crucial to understand the nuances.

What is Medicare?

Medicare, a federal health insurance program, is offered to those who are 65 and older or to those who have been declared disabled by the Social Security Administration. Medicare is administered by the Department of Health and Human Services, Centers for Medicare and Medicaid Services. Income or personal assets do not impact eligibility.

When you become enrolled in Medicare, you automatically have Part A, which covers hospital care, skilled nursing facility care, hospice and some home health services. Part B, which is medical coverage, costs $104.90 per month during 2015. Medically necessary services and preventive services are covered by Part B.  You can enroll in Part A without enrolling in Part B.

If you are needing prescription coverage, you can enroll in Part D, which also is optional. There is a charge for Part D coverage, but you may qualify for reduced or free premiums depending on your income. There are several different providers offering Part D coverage, so you need to compare the coverage with your prescriptions to ensure you make the best selection for your needs.

                                     *Official site

What is Medicaid?

Medicaid is a health insurance that is offered through a partnership between the state and federal governments. It provides health coverage to those who meet special eligibility requirements. It was created to help improve the health of those who otherwise may not be able to seek medical care due to limited financial resources.  

Because Medicaid is offered through a state partnership, its guidelines and eligibility requirements vary from state to state. In Florida, the Agency for Health Care Administration is responsible for Medicaid. During 2014, the Statewide Medicaid Managed Care (SMMC) program was implemented, which means if you are eligible for Medicaid you enroll in a health plan.

Sometimes people apply for Medicaid to cover the costs of long-term care, such as services provided by a nursing home. Medicare does not cover those expenses for you [after a limited initial period], so if you don’t have adequate insurance coverage of your own, you may have to apply for Medicaid to cover the costs of your medical coverage if you need long term care.

                                       *Official Florida Medicaid site

Combination Coverage

You can be eligible for both Medicare and Medicaid. In those situations, the two providers work together to cover the costs of medical expenses. You need to show proof of both kinds of coverage to your medical providers.

Important Things to Remember

Your income and assets do not affect your eligibility for Medicare, but they do however impact your Medicaid eligibility.  Medicaid is only offered to those who are low income, meeting the eligibility guidelines set by your state, and do not have assets that exceed the specified limits. Medicaid eligibility and some ins and outs are issues I hope to touch upon in this series but if you feel you could benefit from personalized information, I am happy to schedule a free 30 minute consultation to see if I can offer assistance.

About Heidi S. Webb, Attorney at Law: Heidi Webb is an Estate Planning and small business attorney located in Daytona Beach, Florida. See what clients are saying about Heidi, follow her on Facebook, and connect with her on Google+ or LinkedIn




What Makes $14,000 a Magic Number in Estate Planning?

Estate Planning and Gift Tax Returns – Knowing Your Numbers… 

Why is $14,000 a magic number in estate planning? Well, this is the amount of the current (2014-2015) tax exclusion, which means that anyone that gives away (or gifts) $14,000 or less to any one individual does not have to report the gift to the IRS. For those lucky people with an excess of funds, this can be a great way to ensure that your family and heirs get more of what might otherwise be their inheritance when you kick the bucket (hence, the IRS doesn’t take such a large percentage of your estate when you go).

This means someone with a decent amount of money could choose to gift $14,000 a year to one or more grandchildren. That way they–or their grandchildren–can avoid at least some of the hefty taxes that come along with the exchange of a rather large estate. These smaller gifts are made in their lifetime. 

If you gift more than $14,000 to any one person (other than your husband or wife) you will have to file a gift tax return (…in some cases this doesn’t necessarily mean that you’ll pay a gift tax: You only have to pay a tax if your reportable gifts total more than $5.43 million [figure from 2015] during your lifetime). 

If you have this kind of money to give, you can give this amount to as many people as you like. However, even if you’re wealthy, you need to be cautious about a few things before taking advantage of this magic number.

What You Need to Know:

If you think there is a chance that you will ever need to apply for Medicaid long-term care coverage, you should definitely consult a knowledgable elder law attorney before setting up any sort of gifting plan. Otherwise you may find that a gift you made to a child or grandchild could hurt your chances of getting Medicaid coverage for long-term care costs.

The IRS may not tax you if you stay mindful of the magic gifting number; however, IRS rules and Medicaid asset transfer rules are two separate entities: If you apply for Medicaid long term care coverage within 5 years of gifting, you may face stipulations or consequences when it comes to securing long term care in a nursing home. 

When Gifting: Plan Ahead, but Expect the Unexpected

You never know what life will bring. It’s important to make sure that you’re taken care of before you distribute your assets to loved ones. Make sure that you seek out an attorney that can help you navigate the multiple avenues of estate planning so that you can live with peace of mind and security. 


Heidi S. Webb Attorney at office

Heidi S. Webb Attorney at Law is an estate planning and small business attorney serving clients in Daytona Beach, Ormond Beach, Port Orange, and surrounding areas. Contact Heidi today for a free consultation: (386) 257-3332.

Law office located on the 3rd floor of the historic Kress building on Beach Street in Daytona (handicap accessible).