Understanding Medicaid planning is an important part of safeguarding your future. Medicaid provides payment for institutional and community-based care for eligible persons who are treated by participating institutions and practitioners. Medicaid covers nursing home care and all other medical care including home care, acute hospital care, physicians and pharmacy. Medicaid is a means-tested, needs-based program with limitations on income and resources. Anyone who meets the income and resource limitations is eligible to receive Medicaid. In the following blog post, we explain the top 3 things to know about medicaid planning in New York.
1. Department of Social Services Rules and Requirements
In order to qualify for Medicaid in New York State, the following must apply:
- The applicant must be a resident of New York State;
- The applicant must meet the current monthly income limit subject to the contribution discussed below; and
- The applicant must meet the resource limits discussed below.
Any asset transferred for the purpose of qualifying for Medicaid is considered an impermissible transfer of assets for which a penalty is imposed. Any transfer of assets for which the transferor does not receive “fair market value” is considered a transfer for the purpose of qualifying for Medicaid unless it can be proven that the transfer was made for another purpose.
Any transfer or sale of an asset for which the applicant receives the fair market value, no penalty period will be imposed. For transfers made exclusively for some purpose other than qualifying for Medicaid, no penalty period will be imposed. An example of this type of transfer would be to repay an outstanding debt, or as a gift for a specific purpose, or a gift
as part of a long-established pattern of gift-giving. A period of ineligibility (“penalty period”) will be imposed for any transfers of assets which do not meet the above criteria. A period of ineligibility for Medicaid institutional services will result from these transfers. Medicaid will calculate the period of ineligibility by the following statutory formula: the dollar value of the
transfer divided by the average monthly cost for one month of nursing home care equals the number of months of ineligibility for Medicaid institutional services. The average monthly cost of care for Western New York is currently $10,078. For example, if Mr. Smith gives $100,780 to his son as a gift, Medicaid will calculate the period of ineligibility by dividing the gift amount by the average monthly cost of nursing home care ($10,780) to equal the number of months of penalty: $100,780/10,780 = 10 months.
There is a 60-month look-back period for all transfers of assets. For transfers made on or after February 8, 2006, the penalty period starts on the first day of the month after which assets have been transferred for less than fair market value, or the first day of the month the institutionalized individual is receiving nursing facility services for which Medicaid would be available, which is later. Any transfer of assets between spouses incurs no penalty period. However, any transfer by either spouse to a third party will create period of ineligibility for the institutionalized spouse, subject to the transfer rules stated above.
- To be eligible for Medicaid in New York state, the applicant must be a resident of New York state.
- Additionally, the applicant must meet the current resource limit and the monthly income limit.
2. Assets, Income and Resources
Income is broadly interpreted, and includes earned and unearned income and most government benefits. The current monthly income limit for a family of one seeking community-based Medicaid (i.e., care in the home) is $845. The current monthly income limit for a spouse of an applicant seeking coverage for nursing home care is $3,022.50.
The resource or asset limit for a family of one seeking community-based Medicaid (i.e., care in the home) is $14,850 plus $1,500 in a separate burial account. The spouse of an applicant seeking coverage for nursing home care is allowed between $74,820 and $120,900 in resources, plus $1,500 in a burial account. Income and resource levels are subject to yearly adjustments.
Resources Exemption for Medicaid Eligibility
Exempt from inclusion in the Medicaid eligibility resource limit are $840,000 equity in your family residence; irrevocable pre-paid burial expenses; personal and household property; one automobile; and any life insurance policies with a face value of less than $1,500. The family residence must be the primary residence of the applicant, and/or his or her spouse or minor or disabled child. It may be a one, two, or three family house, and also includes any attached property. In order to qualify as the family residence (referred to by Medicaid as “homestead”), the home must be necessary and appropriate to the applicant. Therefore, if an individual with no spouse and/or no minor disabled child enters a nursing home and is not medically expected to return home, he or she would no longer have an exempt homestead due to the fact that the home would no longer be “necessary or appropriate” for that individual. It would then be treated as an available resource for Medicaid eligibility purposes.
Real Estate Exemption for Medicaid Eligibility
Many of my clients’ most valuable asset is their home. In Medicaid planning, there are many protections for those who are going to nursing homes that own homes. First off, if you have a child caregiver, you may be able to transfer the house to them without being penalized. If you’ve had a brother or sister that has helped you with living expenses, you may be able to transfer the house to them. Also, you will be able to transfer the house to your spouse. It’s very important in order to do this that you have a proper power of attorney.
- The current monthly income limit for a family of one seeking community-based Medicaid (i.e., care in the home) is $845.
- The resource or asset limit for a family of one seeking community-based Medicaid (i.e., care in the home) is $14,850 plus $1,500 in a separate burial account.
3. Medicaid Home Care
Medicaid home care services include:
- Part-time or intermittent nursing;
- Home health aide services;
- Physical, speech, and occupational services;
- Personal care services;
- Care provided through the long-term health care program (“nursing without walls”).
To obtain these services, one must have a written order for a plan of treatment by his or her physician, and must pass a “nursing assessment” and a “social assessment”, which will assess the individual’s need for and appropriateness of the care. The plan of treatment must be approved by the provider prior to commencement of the home care services.
Most importantly, the average net monthly cost of the proposed care is then compared against the average monthly cost in a residential facility to determine if the plan of care is cost effective. If the average monthly cost of the home care exceeds 90% of the cost of institutionalization, the home care will be denied in favor of placement in a facility, subject to certain exemptions, which are stringent.
- To obtain home care services, one must have a written order for a plan of treatment by his or her physician, and must pass a “nursing assessment” and a “social assessment”.
- The plan of treatment must be approved by the provider prior to commencement of the home care services.
Experienced Rochester Medicaid Planning Lawyers
We hope this blog post helped you better understand medicaid planning in New York. If you or a loved one want to start medicaid planning in Rochester, please be sure to contact our Medicaid attorneys at Friedman & Ranzenhofer. Let us help the ones you love.