Question: I have heard that the proposed New York State budget changes may place seniors in jeopardy when it comes to qualifying for Medicaid benefits. Can you give me some information about the proposed cut backs and how it may affect seniors like myself?
Answer: Currently, the private pay rate of nursing home care on Long Island ranges from $9,000.00 to $30,000.00 per month. Given this exorbitant cost of chronic care, Medicaid has become the safety net for the elderly in need of long-term nursing home care. Governor Andrew Cuomo has appointed a Medicaid Redesign Team (“The Team”), which is a task force created to make recommendations for reforming the present system. At the time of this writing, there are two particular recommendations that would drastically reduce benefits to the elderly and put seniors in jeopardy. One recommendation is to abandon spousal refusal and the other is to create a 5 year look back for transfers in the community Medicaid program.
While Medicaid is a Federal program, it receives funding from both Federal and State budgets. As a result, each state has some leeway in crafting its own Medicaid program. New York is one of the few states which still allows “spousal refusal.” Spousal refusal requires the Medicaid agency to consider only the income and assets of the applicant, not the spouse. This has proven to be very useful in New York, allowing the spouse that does not require care, or the “community spouse”, to preserve their own income and assets and avoid impoverishment brought on by the catastrophic cost of care for their chronically ill spouse. The Team’s suggestion to eliminate spousal refusal would require the community spouse to contribute all assets in excess of $109,560.00 and all income in excess of $2,739.00 per month toward their spouse’s care. Given the cost of housing, real estate taxes, insurance, utilities and other expenses in New York State, and particularly on Long Island, many elderly community spouses may find themselves without sufficient funds to live in their homes once their spouse requires this chronic nursing home care.
Remember, spousal refusal is not a matter of preserving assets for the next generation, it is a matter of preserving assets and income of a community spouse, keeping him or her from becoming impoverished. Under nursing home care budgeting, the community spouse can keep a maximum of $2739.00 per month in income. Assuming the community spouse has that sum, the balance of income belonging to the ill spouse must be paid to the nursing home. If the community spouse has in excess of $2739 per month, that surplus income would also have to be paid to the nursing home. While residence would be exempt, any assets in excess of $109,560.00 would have to be utilized to pay for the ill spouse’s care. This requires the community spouse, already dealing with the emotional complexities of placing their spouse in a nursing home, also being burdened with the financial crisis of paying for the exorbitant costs of their care. This would be a travesty for elderly community spouses.
It is important to note that the Team has also suggested a more aggressive recovery against the estates of Medicaid recipients and their spouses. If spousal refusal is left in tact and a more aggressive estate recovery plan were instituted, the community spouse would be able to use the couples assets during his or her lifetime, but his or her estate would have more exposure at her death. It would seem that the expansion of Medicaid’s right to recover from estates is the fair result, take the assets after the community spouse has died and do not enact recommendations which would impoverish them during their lifetime.
The other proposal that would greatly affect the elderly population is the five year look back period that would be applied to the transferring of assets for community Medicaid applicants as well. Under the current Medicaid regulations in New York State, the five year look back only applies to applications for Medicaid reimbursement in long term care facilities. This new regulation, if adopted, would create a penalty for any transfer of assets made with the five years prior to the ill spouse requiring care at home. In many situations, a patient does not know five years in advance that they will need this elevated level of care and therefore, may have made gifts to family members without even considering the effect it would have on a future Medicaid application. This proposal penalizes such behavior and leaves the senior in need of care without any safety net at all. Currently, we are able to keep the senior at home with care without the expense of paying for care in a facility. This is at least an option for seniors who do not qualify for nursing home care reimbursement from Medicaid. Furthermore, it has always been the belief that the less onerous application process and the absolution from penalties for transfers gave recipients an incentive to utilize the home care program at a much lower cost to the Medicaid system.
As an Elder Law attorney and a taxpayer I understand both sides of the problem. We must get the State budget under control and the Medicaid program is certainly one of the biggest items on the budget. By the same token, we must not abandon our Senior Citizens that reside in this State, those who have paid taxes in this State for most of their lives and are already struggling to remain here and live in their communities amongst their family and friends.
By: Nancy Burner, Esq.