Medicaid Planning Issues with Prior Military Service Payments
A Radio Interview of Attorney John R. Frazier by Attorney Joseph Pippen
A complete transcript of the program begins below:
Attorney Pippen:
We have attorney John Frazier on the line here. Good morning, John.
Attorney Frazier:
Hey, Joe, how are you doing today?
Attorney Pippen:
I’m doing great. So what’s up? Before we get started on your topic of the day, so I met with the client that we have both talked about a little bit, who has a mother who just recently within the last month came to Florida. And she has a rental home in New Jersey, close to the beach. So we discussed how that works in Medicaid. And maybe you can refresh the audience’s memory here in a few minutes. But the question I have, the mother is in a facility called The Crossing at Riverview. Are you familiar with that facility?
Attorney Frazier:
I believe that’s an assisted living facility but I’m not sure-
Attorney Pippen:
Well, no, it’s a memory care. She’s in a memory care part of the facility.
Attorney Frazier:
Okay. And in Florida memory care means assisted living, which means, unfortunately, waiting list. So we would have to navigate the assisted living Medicaid waiting list process with the Area Agency on Aging, and regarding the completion of the 701S form. And the goal of that planning would be to get a score of five. And we would only be on the waiting list 30 to 60 days, if the person is in an assisted living facility.
Attorney Pippen:
Okay. All right. Well, that’s good to know. So I need to pass that along to her and see how she wants to go from here. Okay. So what is the Medicaid tip of the week?
Attorney Frazier:
Today I was going to talk about the three types of monthly payments that we see associated with prior military service. The first one, and I think most people are probably familiar with this is a military retirement pay. And there are two general ways that you receive that. That would be 20 years of active duty military service, 20 years, or if you are medically retired from the military, you can also be eligible for that. That is paid by the Defense Finance and Accounting Service, also known as DFAS. And as far as Medicaid is concerned, that’s treated just like a social security or a regular pension, and all of that income would be countable for Medicaid purposes. In Florida, we have an income cap of $2,382 a month, so that would all be countable income. It is also taxable as far as income taxes are concerned.
The next one, and I think most people are familiar with this is service connected VA disability benefits also known as disability compensation. This is sort of a common sense thing where a person is in the military active duty and has an injury or illness that occurred while during military service or aggravated during military service. These payments are paid by the VA, the Veterans Administration. They’re non-taxable, and there’s a rating system that the VA has between 0% up to 100% service-connected disability.
One of the things about this that I think that many people are not aware of, if the person has a service-connected disability of 60% or higher, then the person then is eligible for free care in a skilled nursing facility. During the course of my career, I’ve done over 3,000 Medicaid cases, but I’ve had probably 10 clients, and I think that they were all 100% service connected. They were eligible for a free care in a nursing facility, and the facility has to have a contract with the VA, but their care was completely free. They were able to keep all their income and there was no asset limit, so that’s something very important to keep in mind.
The next program that we see, which I think people are not as familiar with is called non-service connected VA benefits, also known as pension. This is something that you have to financially qualify for. It’s got some similarities to Florida Medicaid. The house would be exempt, the car is exempt. There’s a accountable asset limit of $130,733. So if the person or the surviving spouse is within those asset guidelines, then the person is eligible. But military service criteria must be met. Prior to September 7, 1980, those military service criteria were very easy to meet. It was just 90 days of active duty military service, one day during wartime, and the discharge was other than dishonorable. And I think what most people don’t realize is that the surviving spouse of the veteran is also eligible for those benefits. Their surviving spouse can receive up to $1,244 a month in this VA pension, which is also non-taxable.
In the assisted living context, this is a very, very important thing to know about because if the assisted living facility charges $3,000 a month and the person’s income is only $2,000 a month, that VA pension of around $1,200 a month would cover the difference. So it’s very important to know about. As far as Medicaid is concerned, there are two parts of this payment. There’s a base pension, and then there’s a higher amount above the base pension called Aid and Attendance. And the base pension only counts towards the income limit in Florida, the income cap of $2,382 a month. So that’s a basic summary of Medicaid Planning issues with prior military service payments of the three programs that I see, which are related to military service.
Attorney Pippen:
All right. Let’s talk about Aid in Attendance. So a military person can get this extra benefit and again, kind of summarize how they would get that.
Attorney Frazier:
If their military service was prior to September 7th of 1980, which is most of my clients, the military service criteria are 90 days of active duty military service, at least one day during wartime, and the person does not have to be in-country. For example, didn’t have to set foot in Vietnam. They just had to serve during that time period. And the discharge is other than a dishonorable, usually honorable, but a general or medical discharge is typically sufficient also. And then the asset guidelines are that the house is going to be exempt, the car is exempt, and they’re allowed to have other assets in the amount of $130,733, and also their surviving spouse.
So let’s say that you have a Vietnam vet or a Korean War vet. And if the vet passes away and he is married at the time that he dies and the surviving spouse doesn’t get remarried, she will automatically be eligible for those VA benefits, even though she did not serve in the US military. And I think this is something that most people don’t know about. Oh, the other thing I wanted to mention is if you have an unmarried person on Medicaid in a nursing facility, the maximum benefit is only $90 a month. And the reason for that is the Florida Medicaid program pays for all of the person’s medical expenses.
Attorney Pippen:
All right, John, if anyone wants to know more information about this and contact you for more information, maybe set up a meeting, or for you to assist them, how do they contact you?
Attorney Frazier:
The office number is 727 586-3306 extension 104. My cell phone is area code 727 748-5374. And my email address is John@attypip.com.
Attorney Pippen:
All right, give the cell number one more time.
Attorney Frazier:
727 748-5374.
Attorney Pippen:
All right, John. Well, thank you so much for calling in with all this good information on Medicaid Planning issues with prior military service payments, and hope you have a great Sunday.
Attorney Frazier:
Okay. You too. Thank you very much.
Attorney Pippen:
All right Thank you. Bye-bye.
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