How much does long-term care cost in Florida?
Andy Rosenberg explains that long-term care expenses in Florida can be staggering. A semi-private nursing home room typically costs around $9,000 per month, or roughly $107,000 per year. For private accommodations, families can expect to pay $10,000 or more per month, exceeding $120,000 annually. These high costs make long-term care planning an essential part of every family’s estate strategy.
Does Medicare cover nursing home or long-term care expenses?
Rosenberg clarifies a common misconception—Medicare does not cover long-term care. While many assume Medicare will pay for nursing homes or extended care, it only covers the first 100 days of a hospital or rehabilitation stay, and only in specific medical situations. Limited home health services may be available for short periods, but Medicare will not cover ongoing assisted living or nursing home costs. This misunderstanding often leaves families unprepared for the financial realities of long-term care.
What is the difference between Medicare and Medicaid?
Medicare and Medicaid serve entirely different purposes. Medicare provides basic health insurance for individuals over a certain age, while Medicaid assists people who lack sufficient income or assets to pay for medical or long-term care costs. Rosenberg emphasizes that when someone needs assistance with daily living—such as bathing, dressing, or mobility—and cannot afford to pay privately, Medicaid steps in as the safety net. Understanding this distinction is key to proper planning.
What are the basic requirements for Medicaid eligibility in Florida?
Medicaid eligibility in Florida is based on what Rosenberg calls the “three-legged stool”: medical necessity, income, and assets.
- Medical necessity refers to the need for assistance with basic daily activities and must be verified by a physician and the Department of Children and Families.
- Asset limits require that a single applicant have less than $2,000 in total assets to qualify.
- Income limits currently stand at $2,901 per month (as of this recording).
If any of these three requirements are not met, Medicaid coverage is denied. Rosenberg stresses that individuals must meet all three criteria to maintain eligibility.
How can families protect their savings from being drained by long-term care costs?
The most effective way to protect family savings, according to Rosenberg, is through long-term care insurance. This type of insurance helps cover nursing home or assisted living costs without depleting personal assets. However, Rosenberg notes that few people have such policies because premiums are expensive and often increase annually, making them unaffordable for retirees on fixed incomes. Once coverage lapses, individuals are left unprotected just when they need it most.
For those without long-term care insurance, legal planning becomes crucial. Rosenberg outlines two main approaches: proactive Medicaid planning and crisis Medicaid planning.
What is proactive Medicaid planning, and how does the five-year look-back rule work?
Proactive Medicaid planning allows individuals to prepare years in advance to protect their assets. Rosenberg explains that Florida enforces a five-year look-back period. This means that if assets are gifted or transferred within five years before applying for Medicaid, those transfers can disqualify the applicant or create a penalty period of ineligibility.
To prepare in advance, individuals can establish a Medicaid Irrevocable Trust, sometimes called a Medicaid Asset Protection Trust. By transferring assets into this trust more than five years before needing care, those assets can be shielded from Medicaid calculations. Rosenberg warns, however, that few people plan that far ahead, which is why most cases involve crisis Medicaid planning.
What is crisis Medicaid planning, and how does it work in Florida?
Crisis Medicaid planning applies when long-term care is needed immediately and no prior planning was done. Rosenberg explains that Florida is one of the most flexible states for this type of planning. Through specific legal tools, assets and income can be legally repositioned—often within days—to meet Medicaid eligibility requirements.
For example, if a person has $300,000 in assets, Rosenberg may use a Personal Service Contract, allowing the parent to transfer funds to a family member in exchange for agreed-upon caregiving services. This legally compliant strategy reduces the applicant’s countable assets while allowing the funds to remain available for care-related expenses.
How can excess income be managed to qualify for Medicaid?
When income exceeds Medicaid’s monthly limit, Rosenberg utilizes a Qualified Income Trust (QIT), also known as a Miller Trust. This irrevocable trust receives a portion of the applicant’s income each month—such as the amount exceeding $2,901—bringing their income below the eligibility threshold. The funds in the QIT can be used for care expenses during the applicant’s lifetime, but any remaining balance typically reverts to the state upon death.
Rosenberg advises families to keep the amount in this trust as low as possible to limit the funds Medicaid may recover later.
Can a regular estate plan or revocable trust protect assets from Medicaid?
Rosenberg clarifies that traditional estate planning documents—such as wills, revocable trusts, and powers of attorney—do not protect assets for Medicaid purposes. These instruments are designed to avoid probate and manage estates after death but do not shield assets from being counted for Medicaid eligibility. Medicaid planning requires specific legal documents, such as irrevocable trusts or personal service contracts, created under Medicaid’s strict guidelines.
Many of Rosenberg’s clients begin with standard estate planning and later return for additional Medicaid planning as their needs evolve.
What future topics will be covered on long-term care and Medicaid?
Rosenberg notes that Medicaid planning can become even more complex when dealing with married couples, jointly owned property, or Florida homestead exemptions. He plans to address these advanced scenarios in a future episode, focusing on how to protect the healthy spouse and preserve home equity while qualifying for benefits.
He concludes by reminding listeners that while long-term care costs can quickly deplete a lifetime of savings, proper legal planning can help families protect what they’ve worked hard to build.