Medicaid Planning for Long Term Care
The high cost of nursing home and home health aides in New York has made Medicaid long term care planning critically important for seniors of all income levels and their families. In fact‚ most seniors will likely require some form of long-term care. Sadly‚ many of them are unprepared for the significant financial burdens such long term care places on their family’s hard earned savings. Financial devastation looms large for a family facing ongoing care at a rate of $10,000 or more per month for home health care and upwards of $15,000 per month for Nursing Home care.
Medicaid Eligibility in New York
The other option to pay for care is Medicaid. A joint federal-state program‚ Medicaid provides medical assistance to low-income individuals‚ including those who are 65 or older‚ disabled or blind. Medicaid is the single largest payer of nursing home bills in America and serves as the option of last resort for people who have no other way to finance their long-term care.
While Medicaid eligibility was not difficult in the past‚ there has been a steady drift towards more complex and restrictive rules‚ the latest being the Deficit Reduction Act of 2005 and the New York State 2020-2021 Budget. These changes have resulted in complex eligibility requirements for those in need of Medicaid benefits. There are a myriad of regulations involving look-back periods‚ income caps‚ transfer penalties and waiting periods to plan around.
Medicaid Nursing Home Care
An applicant for both Community and Nursing Home Medicaid (Chronic Medicaid) cannot have assets that exceed $15,750.00 (in 2020), excluding retirement savings as long as they are in the required pay-out status and an irrevocable pre-paid burial account. When an applicant applies for Nursing Home Medicaid, the local Department of Social Services (DSS) will “look-back” five years at all financial accounts in the name of the applicant and the applicant’s spouse. The purpose of this look-back is to determine whether the applicant (or spouse) has transferred any monies out of his or her name in the five years immediately preceding. To the extent that assets have been transferred, DSS will penalize the applicant which will result in a period of ineligibility for Medicaid. For approximately every $13,400.00 transferred, Medicaid will not pay for one (1) month in a nursing home.
The guidelines for Community Medicaid (home healthcare aides) in New York State recently changed. Effective October 1, 2020, a look-back period of thirty months will apply for all transfers made. Prior to this new law, Medicaid planners could make transfers to an irrevocable trust or otherwise without causing a period of ineligibility.
By engaging in estate planning while you are healthy, you can minimize your asset exposure if a time comes when you need to rely on Medicaid. The gold standard for asset protection, is the creation and funding of an Irrevocable Trust. If you were to fund an Irrevocable Trust with certain assets and more than 2.5 years for Community Medicaid or 5 years for Chronic Medicaid pass, Medicaid will not look to those trust assets as available to pay for your care. It is important to note, that even without planning, New York law allows certain exempt transfers that can be done on the eve of entering a nursing home to preserve some or all of the assets - such as spousal refusal and transfers to disabled children.
Long-Term Care Insurance in New York
While some seniors are able to afford private pay care‚ the cost of long-term care will wipe out savings of all but the wealthiest families in a matter of years. Those who have planned ahead by purchasing long-term care insurance have a degree of certainty and peace of mind‚ knowing that they have a lesser need to rely on other sources in the future. Unfortunately, many can’t afford the high cost of long term care insurance or worse, because of age of medical condition cannot qualify for long term care insurance. If you do have long-term care insurance‚ you should be aware of what your policy covers. Many policies have high deductibles or only provide for a short period of care. In fact‚ many who have long-term care insurance still have to resort to Medicaid to pay for their care.
Our Elder Law attorneys have the experience and the expertise to help avoid the financial ruin associated with the high cost of long-term care. With locations on Long Island and in NYC, we know the nuances of each county and can explain Medicaid eligibility and implement the planning and application process. Let us supply solutions to your Medicaid Assisted Living, Nursing Home, and Home Care needs.