To qualify for Medicaid benefits in New York, you’ll be required to endure a long and complex process. Much will depend on whether you, your spouse, or another loved one will need community-based care or nursing home care. Medicaid applications are very complicated and include strict deadlines and documentation requirements.
Cona Elder Law has been assisting clients with Medicaid planning, including asset protection, Medicaid applications, home care coordination, and related services for over 25 years. We’ve helped thousands of our clients through the Medicaid application and planning process to ensure they get the care they need without losing everything.
Medicaid applications require considerable work and documentation to demonstrate qualifications, such as financial eligibility and medical need. In fact, it often appears that the Medicaid agency in New York State seeks to deny benefits to applicants as denials are common if there is even a single piece of information or documentation missing. If an application isn’t prepared completely and properly, it is quickly denied, leaving you or your loved one to pay for care out of pocket. This is where Cona Elder Law comes in; we secure Medicaid approvals for our clients, saving time, money, and mental anguish.
Medicaid planning is a multifaceted strategy to preserve assets while seeking to qualify for Medicaid benefits as soon as possible. The planning can involve asset transfers into trusts, transfers of real property, promissory note/gift and loan plans, partial asset spend-down plans, and other methods of asset protection. There are look-back periods and penalty periods (which are not the same) which must be accounted for in all asset protection plans. As such, the earlier you plan, the better.
Many people think they do not qualify for Medicaid benefits because they have “too much money” or “too much income”. They panic when placed in a nursing home that costs $15,000/month because they realize their life savings will be eaten up in short order. This is where asset protection planning comes in; even if an individual did not engage in any planning whatsoever and is admitted to a nursing home now, that person can still protect approximately 50% of their assets. And because New York is a spend-down state, income will never prevent a person from being eligible for Medicaid benefits. In addition, if receiving home care or Medicaid community benefits, that income can be protected by using a pooled income trust.
Medicaid requires that you have very little in assets in order to qualify. If you have more than the resource limit, you’ll have to reduce your assets in order to become eligible for Medicaid benefits. As noted above, it is possible to diminish your holdings in order to qualify for Medicaid, including transferring assets, such as your home, to your spouse or children, under certain circumstances.
Trusts can also preserve a person’s assets. A Medicaid Asset Protection Trust, also known as an Irrevocable Asset Protection Trust, is a very useful tool for protecting cash, real estate, and virtually all types of financial assets. Interest and dividends earned by the trust can be paid to you, but you cannot have access to the principal. Trusts are much safer than transferring money directly to individuals, such as your children, because your assets would then be subject to your children’s issues, such as divorce or creditor problems.
In addition to being irrevocable, assets must be transferred to the trust (or otherwise) prior to the five-year look-back period in order to avoid any penalty periods. Transfers made within the five-year look-back period of applying for Medicaid will incur a penalty – a period of time during which the applicant will not be eligible for benefits and must pay out of pocket for their care. If you are considering transferring assets, it is imperative that you consult with an experienced New York Medicaid planning attorney to avoid risking ineligibility and making a costly mistake.
Married couples have special rules and exemptions when applying for Medicaid benefits. The person who is seeking Medicaid coverage may legally make an exempt transfer of their assets to their spouse. The “well spouse” who now has all the assets will sign a spousal refusal, stating that he or she is refusing to make those assets available for the care of the other spouse. Based on this, Medicaid benefits must be provided to the spouse in need of care. The catch is that the Medicaid agency can pursue a lawsuit against the well spouse in the future to recoup the costs of care provided to the other spouse. A knowledgeable and experienced Elder Law attorney can advise you of the risks and provide a cost-benefit analysis.
While Medicaid is a program for long-term health care, Social Security provides monthly income to recipients. All sources of income are included in a Medicaid recipient’s monthly budget, called “NAMI”, Net Available Monthly Income, including Social Security payments, pension, and other retirement benefit payments, which must be contributed toward the cost of care each month.
Medicaid examines the financial records of every applicant to determine eligibility for long-term care. If you decide to dispose of or transfer any assets, you must do so far in advance of an application for Medicaid benefits. Otherwise, you may be subject to what’s called a “penalty period,” or a period of time during which Medicaid will impose a penalty period that delays eligibility. You will be required to pay for your own care until you have assets below a specific limit. In the case of nursing home care, that could be a significant delay for someone in need of immediate long-term care.
A New York Medicaid planning attorney can help preserve those assets so that they are not completely obliterated paying for long-term care. There are some exempt transfers. In addition, trusts, and other instruments can protect assets for the benefit of both a recipient and their beneficiaries.
Currently, there is no look-back or penalty period for Medicaid community care, including home care and adult day care services. This means that an individual can transfer assets in any amount out of their name today and be eligible for Medicaid home care or community-based care on day one of the following month. Resource and income limits will apply at the time of application and most people will need a pooled income trust to protect excess income.
Be aware that this rule will not last forever; in fact, New York has passed a look-back period of 30 months, or 2.5 years, for Medicaid home care and community-based care. This look-back period and any resulting penalty periods are expected to be implemented around March of 2025.
Medicaid planning is as complex as it is confusing. Costly mistakes happen when not working with an experienced and knowledgeable Elder Law attorney. Work with a New York Medicaid planning attorney to learn about your options and how you can preserve assets while securing care for yourself or your loved one.
Cona Elder Law stands ready to help make a difficult process easier. With over 25 years of experience, our Medicaid planning attorneys know how to structure trusts, asset transfers, and other instruments to preserve as many assets as possible before you need Medicaid. Make an appointment today to discuss Medicaid planning and Medicaid applications to ensure you get the care you need while protecting your assets.
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