People getting close to retirement age, those recently diagnosed with a serious medical condition and also those who have just started estate planning may need to think about long-term care. Most people do not have insurance that will cover long-term care expenses unless they purchased a special policy.
Despite what many people believe, most forms of private insurance and Medicare refuse to cover long-term care services. Whether you need a nurse to come to your home or to stay in an assisted living facility, you would need to either pay for those costs out-of-pocket or qualify for Medicaid.
New York generally expects that Medicaid applicants will diminish their personal assets before they apply. Changes to the process of verifying financial eligibility may impact your estate and Medicaid planning in the upcoming months.
New York will soon establish a 3-year lookback period
The federal guidelines for Medicaid require a 5-year review of financial circumstances. The person applying can incur substantial penalties for any gifts or transfers made in the five years before they apply for benefits. They may have to pay that amount out-of-pocket before they receive any coverage.
However, New York has recently adopted new state Medicaid rules that will go into effect on April 1, 2021. At that time, the lookback period for applicants in need of Medicaid will be three years. Obviously, a lot can change in three years, which is one reason why proactive Medicaid planning is so important. The sooner you or your aging parents make those critical transfers and plans, the more assets you will theoretically be able to protect if Medicaid becomes necessary.