Question: My husband may soon need a Nursing Home. I have been told that if he needs to go to a Nursing Home, we will have to spend down all of our assets before he can be eligible for Medicaid benefits, is this true?
Answer: No, you will not have to spend down all of your assets. Because Medicaid is a need based program, certain income and asset requirements must be met in order to be eligible. An applicant for Nursing Home care in New York in 2021 may have non-retirement liquid assets in the amount of $15,900.00. Assets that are not “counted” are retirement accounts in any amount so long as he is taking the required monthly distribution, life insurance policies with a cash surrender value under $1500, and an irrevocable prepaid burial account in any amount. Any income received in excess of $50.00 per month must be contributed to the cost of care at the nursing home. However, the good news is that in New York, there are two important exemptions to the eligibility requirements where the individual requiring a nursing home has a spouse still residing in the community who depends on the joint income and assets to pay expenses.
Spousal Impoverishment Allowance
Generally speaking, a nursing home resident receiving Medicaid must pay monthly income over $50.00 (excluding medical premiums) to the Nursing Home to pay for the cost of care, with Medicaid paying the balance. Medicaid recognizes that the well spouse must have enough money to safely live in the community and that the couple may have relied on the Medicaid recipient’s income. Therefore, if the community spouse’s income is less than $3,259.50, he or she can use a portion of the Medicaid recipient’s monthly income to meet this Minimum Monthly Maintenance Needs Allowance (MMMNA).
Although the Medicaid applicant is permitted to have no more than $15,900.00 in his name at the time of application, the community spouse is permitted to keep $130,380.00 in liquid assets plus the primary residence. Additionally, under New York Medicaid Law, the community spouse also has the option of signing a “spousal refusal” and, so long as that document is timely filed with the application, the Medicaid agency will determine eligibility for the institutionalized spouse without considering the assets or income of the community spouse. Assuming a spousal refusal is signed, the community spouse can maintain significantly more assets in his or her name without affecting the eligibility of his or her spouse. This is a particularly important provision of the law when planning for Nursing Home Care for an individual with a spouse in the community where no pre-planning has been done. Many of our clients are surprised to learn that transfers of assets can be made to the community spouse, and that the traditional five year look back does not apply. In practice, what this means is that when faced with a crisis, planning can be done in month one and the spouse in need of care can be eligible for Medicaid the following month.
In closing, although pre-planning is always the preferred method, especially due to Medicaid’s right to seek estate recovery, Medicaid planning can be done at virtually any point in the process, ensuring that your loved one receives the care that he or she needs while minimizing the financial impact on your family.