Life Insurance is important but if you have Medicaid, you have to understand how life insurance can affect medicaid benefits.
Medicaid is the state and Federal partnership that provides health coverage and other benefits for select people in Florida and other states with low incomes.
In order to qualify for this benefit program, you must be a resident of the state of Florida, in need of health care/insurance assistance, and whose financial situation would be characterized as low income or very low income. You must also be a U.S. national, citizen, or have satisfactory immigration status. To qualify for this benefit, you must:
- Be over the age of 64; or
- Be pregnant or have a child 18 or under; or
- Be blind or disabled; or
- Have a child, parent, or spouse in your household who is blind or disabled
In order to qualify, you must have an annual household income (before taxes) that is less than or equal to the following amounts:
|Household Size*||Maximum Income Level (Per Year)|
Medicaid eligibility in Florida is determined either by the Department of Children and Families (DCF) or the Social Security Administration (for SSI recipients).
DCF determines Medicaid eligibility for:
- Parents and caretakers relatives of children
- Pregnant women
- Former Foster Care Individuals
- Non-citizens with medical emergencies
- Aged or disabled individuals not currently receiving Supplemental Security Income (SSI)
Individuals may apply for Medicaid:
On-line at the DCF/ACCESS Florida website at: http://www.myflorida.com/accessflorida/
By submitting a paper application, which may be requested by calling 850-300-4DCF (4323), and submitting it in person, by mail or fax. Customer Service Center locations and fax numbers can be found at: http://www.dcf.state.fl.us/programs/access/map.shtml
Telephonic Applications-an initial request to complete a telephonic application should be referred to the Customer Call Center (CCC) or direct the requestor to call 850-300-4DCF (4323).
Medicaid for Aged or Disabled
Medicaid for low-income individuals who are either aged (65 or older) or disabled is called SSI-Related Medicaid.
Florida residents who are eligible for Supplemental Security Income (SSI) are automatically eligible for Medicaid coverage from the Social Security Administration. There is no need to file a separate ACCESS Florida Application unless nursing home services are needed.
What about How Life Insurance Can Affect Medicaid?
The reason why I wrote this article is because when you have Medicaid you can only have so much in assets to your name to keep your benefits. Next I want to understand what Medicaid considers assets.
Medicaid Asset Limits
- Cash: An applicant can possess up to $2,000 cash that will not be counted as an asset in determining Medicaid eligibility.
- Primary Residence: An applicant’s primary residence is exempt if it meets two fundamental requirements. First, the home must be in the same state in which the owner is applying for Medicaid. Second, the applicant’s equity interest in their home must be valued at $572,000 or less, although some states use a higher limit of $858,000.
- Car: One automobile of any current market value is considered a “non-countable” asset for Medicaid purposes as long as it is used for the transportation of the applicant or another member of their household.
- Funeral and Burial Funds: Medicaid considers the value of any pre-paid funeral or burial arrangements exempt. Pre-purchased burial plots are exempt not only for the applicant but also for their immediate family members. If arrangements have not been pre-planned and pre-funded, a separate bank account containing up to $1,500 for funeral expenses can be excluded.
- Property: According to federal law, any real or personal property that is essential to an applicant’s self-support, regardless of value or rate of return, is excluded. That could include farms, rental properties and other real estate investments that generate income. The catch is that the property must generate at least six percent of its value annually to qualify for the exclusion.
- Life Insurance: Only the cash value of a life insurance policy owned by an applicant is counted, therefore all term life insurance policies are ignored. The combined cash value of any universal, permanent and variable life insurance policies must not exceed $1,500 to be exempt.
Read that last part again…
If you own a Life Insurance policy that builds cash value, the cash value can not exceed $1,500. Most people don’t even pay attention to the cash value that builds over time in a Life Insurance policy (if it has cash value). You can call the Life Insurance company to find out how much your cash value has build up over the years.
If you find yourself in a situation where the cash value is bigger then allowed you can contact your Insurance agent to find out your options before you lose your Medicaid. If you need help with this now, you can book an appointment with me directly by CLICKING HERE.
Medicaid is a very complex government program. In addition to asset limits, there are many other rules for calculating countable income and determining one’s medical need for care and assistance. Furthermore, slightly different financial rules apply for married couples. It is recommended to familiarize yourself with these guidelines early on in case you ever need to help an aging loved one apply for Medicaid (or file an application yourself).