Question: My mother recently fell and is in a rehabilitation center with Medicare paying her bill. I don’t think I will be able to take her home this time, it seems that she will need full time nursing home care. I understand that there is a five-year lookback, how will this affect my mother’s eligibility for Medicaid.
Answer: As you are likely aware, Medicaid is a means tested program and as such, to be eligible applicants must meet certain income and eligibility requirements. These requirements differ depending on the program the individual is applying for. For Chronic Medicaid, the Medicaid that will pay for a nursing home, the applicant can have up to $14,850.00 in their name in non-retirement assets. They can have an unlimited amount of retirement assets so long as they are receiving a monthly a maximized monthly distribution. An irrevocable pre-paid funeral is also considered an exempt resource. You did not mention whether your Mother was married or single, where the applicant is married and there is a spouse living in the primary residence that residence is also exempt. With respect to income, the applicant is permitted to maintain $50.00 per month of their income, all excess income must be contributed to the cost of their care at the nursing home. Again, where there is a spouse there are certain circumstances where the community spouse can retain a portion of the institutionalized spouse’s income. With respect to the five-year lookback, that is a requirement for Chronic Medicaid only (there is no lookback for Community Medicaid – the Medicaid which covers the cost of homecare). The lookback refers to the concept that upon entering the Nursing Home and applying for benefits the applicant must provide full financial disclosure for the five-year immediately prior to institutionalization for herself and her spouse assuming she is married. In the event that the applicant transferred any assets out of his or her name, there will be a penalty assessed unless those transfers are considered “exempt” transfers for the purpose of applying for Medicaid. Transfers which will be considered exempt are; transfers to the spouse (this is the concept of Spousal Refusal in New York); transfers to a disabled child; transfer of the primary residence to a “caretaker child” this is a child who has lived with the parent requiring Nursing Home care for the two years immediately prior to institutionalization providing some level of care support and finally transfers of the primary residence to a sibling with an equity interest who lived in that residence for one year prior to institutionalization. Transfers other than those listed, in most cases will create a period of Medicaid ineligibility. In all cases when dealing with the possibility of long term care it is important to consult with an elder law attorney who concentrates in this area. In most cases there are planning techniques which can help to alleviate if not eliminate the financial burden when facing the cost of Nursing Home care.