It was Monday morning, and I had just sat down with my cup of coffee and was waiting for my computer to turn on, when my phone rang. It was John M. He was so worried about his meeting with us later that afternoon, as he knew he had his wife, Susan, to visit in the hospital, and timing is everything for her. While I offered to make his appointment a bit earlier, I realized that it wasn’t the time of the appointment that he was nervous about, it was the meeting itself.
You see, John had anxiety over allowing us to know how much money he and his wife had in their accounts. He was nervous that she would not qualify for any Medicaid benefits, and he was left feeling like he had to lose everything in order for her to be in a nursing home. Susan was no longer safe at home, and needed a secure facility that would keep her from wandering around the neighborhood, but at a private pay rate of $11,000 per month, he knew he would be out of money in no time. Where would that leave him? He is healthy and still wants to live at home, but feared what his future would hold.
John and Susan’s assets were over the $126,420 maximum that the Department of Children and Families (DCF) has set. When we realized this at our meeting, our attorney, Howard S. Krooks, CELA, CAP, calmly reassured John, and introduced the concept of “spousal refusal.” Of course, when John heard those words, he instantly went on the defense and stated he loved his wife, and did not want to refuse providing for her care. This happens a lot when spousal refusal is mentioned, but read further to learn what Howie explained to John.
“It does not mean you do not care for your wife, John, but it is a tool we use in Florida to make sure that a spouse does not go into poverty. By refusing to use the income or assets you have for her care, it puts the responsibility on Medicaid to be sure her medical bills are paid,” he said.
Pros and Cons of Spousal Refusal
How does spousal refusal work? Well, the upside is it essentially allows the well spouse of a married couple to keep the marital assets while the ill spouse can qualify for Medicaid, even if the assets exceed $126,420. This makes Susan eligible for Medicaid once all assets are transferred into John’s name, and she has less than $2,000 in her name. Then, a legal document known as a spousal refusal is completed and sent to DCF, stating the well spouse is unable to make his share of assets available for the cost of the ill spouse’s care.
And while Medicaid is given the legal right to seek recovery against the refusing spouse’s assets, this approach locks in the lower Medicaid rate at facilities. Further, with proper planning, none of the well spouse’s assets need be used to reimburse Medicaid for the cost of care provided to the ill spouse.
John was comfortable with what Howie explained to him, so once all of the assets were transferred to John and Susan was approved for Medicaid benefits, John called us back and wanted to get his assets protected. We set him up with a Medicaid Asset Protection Trust, which allowed him to not only live his life, but also to become Medicaid eligible after five years, if he also needed long-term care down the road.
Medicaid and Long-Term Care Planning
For more information about Medicaid and long-term care planning, please visit our website or contact us and we can discuss the options available to you.