Medicaid Planning for Those Under Age 65: A Radio Interview of Attorney John R. Frazier by Attorney Joseph Pippen.
A complete transcript of the program begins below:
Attorney Pippen:
All right. Attorney John Frazier’s on the line. Good morning, John.
Attorney Frazier:
Hey Joe, how you doing today?
Attorney Pippen:
I’m doing great and you?
Attorney Frazier:
Doing great.
Attorney Pippen:
What’s our Medicaid topic of the week, this week?
Attorney Frazier:
Today, I was going to talk about Medicaid Planning for those under age 65. My typical client is going to be 65 or older, but over the years, I’ve had a number of clients under 65, become disabled for a variety of different reasons. Unfortunately, we see early-onset Alzheimer’s, Lou Gehrig’s Disease, Multiple Sclerosis, head injuries from accidents, such as motorcycle accidents or falls, and I’ve had clients in all of those categories under the age of 65, need to apply for Medicaid because they needed long-term care primarily in a nursing facility. So, I’ll be talking about this in the context of applying for Medicaid benefits, either in a nursing facility or assisted living facility.
If a person is under the age of 65, they have to be classified either as disabled under Social Security. There’s two types of disability statuses under Social Security. You have SSDI, Supplemental Security Disability Insurance. Or, you have SSI, which is Supplemental Security Income.
So if the person is under the age of 65, they must either be classified as disabled under Social Security or if they’re not, the state of Florida must classify them as disabled through a disability process that they have, where the Medicaid applicant is required to submit all of their medical records to the state of Florida. And historically the name of that organization within the state of Florida is called the District Medical Review Team or DMRT.
So with Medicaid Planning for those under age 65 if the person is classified as disabled under Social Security, or the state of Florida classifies them as disabled, then they are able to proceed with applying for Medicaid and can end up, if necessary long-term in a nursing facility on Medicaid. So, that’s a basic overview. Other than that, applying for disability or being classified as disabled by the state of Florida, the Medicaid qualification rules are exactly the same for an individual under the age of 65.
Attorney Pippen:
All right. Well, John, we have a situation where you gave advice on, but it was a young lady, 51 years old, who developed early onset dementia, could no longer work and she didn’t have to go to assisted living yet or a nursing home or anything but you gave her advice on how she could… She had to get Social Security Disability classified, which really increased her income now because she gets in a nice monthly check and sooner or later, she’d probably have to go into a nursing home. But the first step was it was to be classified disabled under the Social Security law.
Attorney Frazier:
Yes, I think there’s a bit of confusion about the two types of disability also when dealing with Medicaid Planning for those under age 65. The SSDI is for an individual who has paid into the system over a number of years, and they have exceeded a certain dollar amount so that they actually start to receive their social security retirement early.
On the other hand, we have SSI. That is for a situation where a person has either never paid anything into the system or has not paid enough into the system to exceed the SSI rate. So say for example, you have an individual born with Down Syndrome can only work a little bit; paid into the system, but not to the point where they exceed the SSI rate, then they would start getting the SSI instead of the SSDI but they both work for the disability classification for Florida Medicaid.
Attorney Pippen:
Well, John, I just thought of a question that you and I’ve never talked about. So I almost hate to ask you because I’m not sure how you’re… I know it’s not within your practice wheel. Somebody crosses the border and then goes into a nursing home.
Attorney Frazier:
Are you talking about state of Florida?
Attorney Pippen:
No… Yeah, let’s talk about the state of Florida since we live in Florida.
Attorney Frazier:
Okay.
Attorney Pippen:
So if somebody crosses over the border, comes up from Cuba or wherever and now they are in the US. They’re not a US citizen. They’ve crossed the border and they wind up in a nursing home. Are they going to get any benefits?
Attorney Frazier:
Yeah, I have actually seen this situation before, not necessarily from Cuba, but from other countries. The rule for that is if the person is not a US citizen, they must be here lawfully with the Green Card for a minimum of five years. Once they’ve exceeded that five-year threshold, then they are eligible for Medicaid.
I had an unfortunate situation, many years back, where a facility was not aware of this rule. They had a non-US citizen applying for Medicaid in their facility, had only been here for four and a half years and they called me and said, “Well, our case was denied. What can we do?” And the answer is, you have to wait until you reach that five-year mark. So we were unable to do anything to assist that client until they reached the five-year mark, so there are exceptions for that.
Also, you can have emergency Medicaid, but I have never seen that in the context of applying for Medicaid in a nursing facility or an assisted living facility, but there is also emergency Medicaid for individuals who are not here, basically lawfully, or for five years.
Attorney Pippen:
Let me give you another example too. Suppose, say a 59 year old who has diabetes gets the COVID, doesn’t recover, has to go into a nursing home. So, they’re 59 years old going into a nursing home. Under those circumstances, would they qualify for Medicaid?
Attorney Frazier:
Well, it goes back to that the disability criteria. They would either have to be on SSI or SSDI, or if they’re not, then the state of Florida would have to do their disability determination. I’ve had it done both ways. Had a situation where a younger lady in her fifties had a head injury. She was not classified as disabled under Social Security. The District Medical Review Team did their disability determination and determined that she was disabled under Florida law and we got her on Medicaid in the nursing facility and she was not on SSI or SSDI.
Attorney Pippen:
So she’d be on Medicaid for the rest of her life, assuming she didn’t recover?
Attorney Frazier:
Well, as long as she stayed in the nursing facility, you’ll be on Medicaid in the facility for the rest of your life. If you transition out of the facility, for example, I have some clients who improved to the point where they can transition to an assisted living facility. There is a waiting list for assisted living Medicaid, but if the person is on Medicaid in the nursing facility for a minimum of 60 days, they can then transition to an assisted living facility on Medicaid.
So we do have some clients who improve. I’ve had some clients who have improved well enough to actually go back into the community on Medicaid. So, that’s a possibility too, after they’re on Medicaid in the nursing facility.
Attorney Pippen:
All right, John. I was mentioning before you came on about the homestead. So in Florida, for a person going into a nursing home facility there, there’s countable assets and non-countable assets in the homestead is a non-countable assets. So a lot of family members just pay the taxes and maintenance
and upkeep and keep the home going as long as the person’s in the nursing home and then selling and then they’re able to keep all the proceeds afterwards. Correct?
Attorney Frazier:
Well, it, it depends if they are still on… Well, the homestead is exempt up to $603,000 for an unmarried Medicaid applicant. If you have a spouse living in the house, there is no limit, so it could be worth $2 million if your spouse is living there. It remains exempt. Now, if the person sells the homestead, while they’re on Medicaid, we have to restructure those assets and bring the Medicaid applicant back to $2,000 or else the person will lose their Medicaid.
So the proceeds from the sale while, while the homestead is exempt, the proceeds from the sale of the property are not exempt and we have to restructure those assets and bring the Medicaid applicant to less than $2,000.
Attorney Pippen:
If the proceeds happen, the sale happened after the person died and then married person died though, the family can keep the proceeds. It doesn’t have to go to the State.
Attorney Frazier:
I do think that really depends on the way that the estate plan is written. So for example, if the estate plan compels the personal representative or the trustee to sell, sell the house, that could raise issues. But under the Florida statute, in the Florida constitution, if they just inherit the property directly, even if there is a probate, that will remain an exempt asset.
So if the property goes through probate and is required to be sold, I think there could be a state recovery in that situation, so I think it depends on the estate planning documents. But for example, if there is no will and the property goes directly to the natural heirs, even through probate, the property would remain exempt under those circumstances. So a person does have to be careful about how they draft their will and their trust, if they’re going to be able to keep their homestead exempt when they die.
Attorney Pippen:
Well, I can tell you, I never directed the homestead to be sold in my state signing documents. So yeah, a long, long time ago, never to do that because then you have cash in the estate as opposed to a homestead going down to the bloodline heirs. A lot of these people who do documents themselves online, they try to do a will or a trust online, it’s the little things like that, that they make mistakes on and they have no idea and who would? Who would know that the language that the house will be sold and given to so and so could cause great damage. If they were in the nursing home, then the state can, is in position to get all the proceeds from the sale of the house depending on the expenses of the nursing home.
So the do-it-yourselfers out there who want to save a few bucks, can really cost themselves thousands and thousands, hundreds of thousands of dollars, just by a little simple error like that.
Attorney Pippen:
Hey, John, give us your contact information. We’re down to the bottom of the hour for the news, so give us your contact information, so anyone who has a nursing home Medicaid, VA benefit type of question can reach you.
Attorney Frazier:
The office number is (727) 586-3306, extension 104. My cell phone is (727) 748-5374 and my email address is John@attypip.com.
Attorney Pippen:
All right, John. You have a great Sunday. Thanks for calling in.
Attorney Frazier:
I hope I was able to make a difference for people today looking at needing Medicaid Planning for those under age 65. Okay. You have a great Sunday too. Thank you.
Attorney Pippen:
Thank you.
If you have further questions be sure to claim your free telephone consultation with Attorney Frazier.