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Can I Keep Florida Medicaid if I Temporarily Have More Than $2,000?

Can I Keep Florida Medicaid if I Temporarily Have More Than $2,000?
September 16, 2022

While we are very experienced in this area, we aren't your typical estate planning firm. We don't just address what should happen to your estate after you leave this earth, but we help plan for your life now. Part of our job as Medicaid planning attorneys is developing plans to assist clients in paying long-term care costs and safeguarding their assets so they can leave something to their children.

In addition to Medicaid planning, clients and their families frequently come to me with tricky dilemmas. I take pleasure in our firm's ability to offer simple and effective solutions and outline a course of action. One such puzzle is whether a relative can keep Florida Medicaid if their assets temporarily amount to more than $2,000.

Countable Assets in Florida

A single person over 65 or disabled who needs Medicaid benefits for health assistance at home, assisted living, or nursing care cannot have more than $2,000 in assets that are countable for Medicaid.

Some common examples of countable (non-exempt) assets that count toward the asset ceiling of $2,000 and include:

  • Cash
  • Bank accounts (checking, money market, savings)
  • Vacation homes
  • Non-primary dwelling property
  • Mutual funds
  • Stocks
  • Bonds
  • Certificates of deposit

IRAs and 401Ks are countable in 37 states. The remaining states provide the exemption of these retirement funds, although several require that they be in payout status. Florida is such a state. 

When Your 401k or IRA is in Payout Status

Payout status denotes that you withdraw at least the minimum amount necessary monthly from your plan. When an IRA is in payout status, its payments will be considered income, but it won't be regarded as an asset when determining whether your IRA or 401k will allow you to qualify for Medicaid

Your eligibility for Medicaid will be impacted if your IRA or 401k is not in payout status because it is regarded as an asset. Depending on your circumstances, we will discuss, as part of the Medicaid-planning process, whether you should keep or liquidate your IRA or 401k. Contact a Medicaid attorney at our offices with experience in this area for more information on what this may mean for you.

When You Have More Than $2,000 in Your Account

At some point in a month, you may have more than $2,000 in your account. Your account is allowed to be temporarily above $2,000 so long as it returns below this figure at some point in the month.

Since income is not considered an asset until the following month, the account may momentarily go beyond $2,000 in value. 

Consider a Medicaid recipient who consistently has $1,800 in savings and receives a $1,500 Social Security check on November 17, increasing the balance in the savings account to $3,300. 

There won't be a problem so long as you have bills to pay or items/services to purchase so that, by November 30, the account balance is back under $2,000. Florida Medicaid wants to see that you spend at least a few days per month under $2,000 (even if the other days you have more than 2K). 

FAQs About Florida Medicaid

How do I turn my 401(k) into a non-countable asset?

Liquating the account is one option to change the 401(k) or IRA to a non-countable asset. Then, an elder law attorney could use a spend-down plan: some common strategies include a special needs trust, personal services contract, or a Medicaid-compliant annuity to protect the assets (among others).

What is the difference between Medicaid and Medicare?

There are two distinct programs, Medicaid and Medicare. Medicaid is a program for low-income persons who meet specific qualifying conditions; state-by-state variations may apply. Our office works mostly with people who do not naturally qualify for Medicaid (i.e., their assets or income levels are too high), and we can legally and ethically qualify them to get help from Medicaid, paying for home health care, ALF care, or nursing home care. 

Medicare differs in that it is a federal health insurance program for those 65 years or older, disabled, or with end-stage kidney disease. Medicare eligibility is not determined by income, and each state offers the same basic coverage level.

Jason Neufeld is the Founder and Managing Partner of Elder Needs Law, a Florida estate planning and elder law firm he created in 2017. With more than 15 years of experience practicing law, he represents clients in a wide range of legal matters, including Medicaid planning, estate planning, elder law, probate, Medicare, and life insurance.

Jason received his Juris Doctor from the University of Miami — School of Law and is a member of the Florida Bar and the Broward County Bar Association. He has received numerous accolades for his work, including being named a Rising Star and Super Lawyer by Super Lawyers and among the Florida Legal Elite by Florida Trend in 2024.

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