MIR Blog

MIR offers financial planning services designed to help elderly clients preserve their assets in safe investments so they may qualify for government financial assistance programs. MIR charges fees to assist elderly clients in submitting Medicaid applications, and we may receive commissions for annuities structured in the planning process. In 7 years filing Medicaid applications, we have never had an application denied.

We are not attorneys and do not offer legal advice or draft any legal documents. The decision to hire MIR is in no way equivalent to or a substitution for an attorney.

Florida DCF Adopts New Medicaid Rules to comply with Federal Rules

Effective NOVEMBER 1, 2007 - Here are the highlights of these rule changes-

Asset Transfer Penalty
Penalty periods for gifts made on or after November 1, 2007 will start on the later date of: (1) the date the individual would otherwise qualify for ICP, (2) the first day of the month the gift occurred, or (3) the day following the last day of an existing penalty period. There is no limit on the length of a penalty period.
Under Old Rules: In the past, when an applicant gifted an asset, the penalty period began the month of the gift.

So, if an applicant gifted $30,000 in January 2007, a six month penalty was assessed (January 1—June 30, 2007). Under these old rules, someone who applied for Medicaid after June 30, 2007 was immediately eligible for Medicaid because the penalty period had expired.

Under New Rules: If that same gift was made on or after November 1, 2007, there would still be a 6 month penalty period, but the period would start based on the later of three dates described above.
Additionally, when a transfer penalty is calculated, the number of penalty months is no longer rounded down. The full amount of the penalty (including the fractional portion) will be enforced.

Under Old Rule: If $18,850 was transferred, that amount was divided by a $5,000 penalty divisor to determine the penalty period ($18,850  $5,000 = 3.77 months). Under the old rules, 3.77 was rounded down to 3 months.
Under New Rules: An $18,850 gift made or after November 1, 2007 will also incur a 3.77 months penalty but it is NOT rounded down. A 3.77 months penalty equals 3 months and 23 days.

Asset Transfer - Look Back Period
The FL Department of Children and Families had intended to increase the look-back period from 3 years to 5 years effective Nov. 1st., but due to an accidental oversight, the look-back period on asset transfers will not increase from 3 years to 5 years at this time. At some future date, DCF will announce new rules to increase the look-back period. When that occurs, we will report the effective implementation date.

Home Equity
An individual’s home will continue to be an excluded asset if the equity in a home does not exceed the new Florida equity cap of $500,000. NOTE: This rule does not apply if the individual’s spouse, child under age 21 or blind or disabled child of any age is residing in the individual’s home.

Annuities
• A Tax Deferred annuity (has a principal balance) continues to be a countable asset.
• A “Balloon Style” or “Deferred Payment” annuity purchased after November 1, 2007 will be treated as an uncompensated transfer (gift) and thus a penalty period will be assessed.
• A “Level-payment” annuity can be purchased after November 1, 2007 if the state of Florida is named as the first beneficiary and the annuity is “actuarially sound.” For applicants with a community spouse and/ or any minor or disabled child, the State must be named as the second beneficiary after those individuals.

Medicaid Information Resource will continue to provide updates and examples of how changes will affect Medicaid eligibility.