Question: If I go to a nursing home, will I have to spend all my assets before I can get on Medicaid?

Answer: No, it is not necessary to spend all your assets before the Medicaid program will be able to pay your nursing home bill.

Let us begin this discussion with an explanation of how Medicaid determines eligibility. To be eligible, you must have less than $14,850 in resources in your name. For home care Medicaid there is no look back period, meaning that you can transfer assets in one month and apply for Medicaid the next month without incurring a penalty for the transfers. For nursing home Medicaid, also known as chronic care Medicaid, the Medicaid program will check to see if you gave away assets to make yourself eligible.

There is a five year look back period for nursing home Medicaid. This means that if you need a nursing home, Medicaid will look back five years from when you need the care to see if you gave away any of your assets. For Suffolk County residents in 2015, there will be a one month penalty period assessed for every $12,390 that is transferred within that five year period. During the “penalty period” you will be responsible to privately pay for your nursing home stay. Once the penalty period is over, Medicaid will pay your nursing home bills.

It is because of these rules that we often counsel clients to create trusts while they are still healthy as a way to get assets out of their name for Medicaid eligibility purposes. The creators of the trust must name someone other than themselves or their spouse to be trustee. If you put your house into the trust, you still receive all property tax exemptions to which you are entitled, such as STAR, Enhanced STAR and Veteran’s. All income in the trust must be paid to you including dividends and interest on any accounts you place into the trust. It is not necessary to place all your assets into the trust. An attorney can work with clients to determine how they can protect assets and not let their quality of life suffer as a result.

Despite these rules, it is never too late for Medicaid planning. There are tools that can be used to protect some of the assets for an individual that needs a nursing home even if they did not take any advance steps to protect assets. Families often come to us with no advance plan and a sick relative being discharged from a hospital to a nursing home.

It is important to note that not every person will not have the same plan. An experienced elder law attorney can assist clients in securing the best payment options possible for nursing home care.