Elder Law
The $2,000 Myth: What Florida Medicaid Actually Lets You Keep
Everyone has heard that Medicaid takes everything but $2,000. It is the most repeated sentence in elder law, and it is wrong in every way that matters.
Here is the sentence that keeps Florida families from ever picking up the phone: "Medicaid makes you spend down to $2,000, so there is nothing to protect." Adult children repeat it. Facility staff repeat it. It contains exactly one true number and it leads families to exactly the wrong conclusion, which is to do nothing and write checks until the money is gone.
The true part, and why it misleads
Florida Medicaid does limit a single applicant to $2,000 in countable assets. The word doing all the work in that sentence is countable, because Medicaid law then proceeds to exclude the assets that make up most of what a typical family actually owns.
What does not count
The homestead is the headline. A Florida applicant's primary residence is generally an exempt asset, subject to an equity cap that adjusts annually, and the cap disappears entirely when a spouse still lives in the home. One vehicle is exempt. Personal belongings and household goods are exempt. Prepaid, irrevocable funeral and burial arrangements are exempt. Certain retirement accounts, properly structured and in payout status, are treated as income rather than as a countable asset. A family hearing "everything but $2,000" is usually sitting on hundreds of thousands of dollars of property that Medicaid was never going to count in the first place.
The married couple's protections
When one spouse needs care and the other remains at home, federal law layers on the spousal impoverishment protections. The community spouse keeps a resource allowance, a substantial sum of countable assets adjusted annually, on top of the exempt home and vehicle, and may also be entitled to a monthly income allowance diverted from the applicant spouse. These rules exist precisely because Congress decided the healthy spouse should not be bankrupted by the ill one, and using them fully is lawyer's work: how assets are titled, timed, and converted between categories changes the outcome by six figures in ordinary cases.
The income cap, and the trust that solves it
Florida is an income cap state, so an applicant whose monthly income exceeds the limit is technically ineligible even at $2,001 of income over. The fix is almost mechanical: a Qualified Income Trust, sometimes called a Miller Trust, receives the excess income each month and restores eligibility. Families who do not know this one device exists have walked away from benefits they were entitled to. It is a document, not a loophole.
What spend-down really means
Even the countable assets above the limit are not simply forfeited. Lawful spend-down converts countable dollars into exempt value: paying down the homestead mortgage, necessary home repairs and accessibility improvements, a reliable exempt vehicle, prepaid funeral arrangements, and, with proper structure, compensation for family caregiving. Combined with the five-year strategies covered in our companion piece on the Medicaid lookback, the realistic picture is this: families who plan keep most of what they built, and even families in crisis keep far more than the myth told them.
See it in your own numbers with the free calculators, then bring the results to a design meeting. From Boca Raton to Tampa to Jacksonville, the rules are identical and the meeting is a Zoom call away.