New Yorkers who are concerned about their financial future should know about a significant change to Community Medicaid that is taking effect later this year. In April of 2020, Governor Cuomo and the New York State Legislature signed the approved 2020/2021 state budget for the state. Included in the new budget is a financial look-back period for Community Medicaid that will determine if any non-exempt assets were gifted to others in the two-and-a half year period before they apply for benefits.
An applicant applying for Community Medicaid will be penalized for any assets transferred during the 30-month period leading up to his or her application. The look-back period applies to all applications that filed as of October 1, 2020, making it tougher for seniors to access important benefits for long-term care after this date. These services include assisted living programs, private nursing, and home health care.
A Financial Look-Back Period Means More Delays for Seniors in Need
Many seniors have acquired assets over a lifetime that would make them ineligible to receive Medicaid benefits. To avoid surpassing asset limits, some people transfer them to family members to keep these assets protected while still enabling them to qualify for Medicaid sooner rather than later.
Prior to the budget revision taking effect this upcoming fall, there was no look-back period for Community Medicaid applicants. So, seniors applying for long-term care benefits who transferred or gifted non-exempt assets in the months and years prior faced no ramifications or delays with eligibility.
Now, seniors applying for Community Medicaid as of October 1, 2020 who have transferred assets out of their names within two and a half years before applying, will face a penalty and be ineligible for a period of time. The greater the total sum of gifts, the longer the penalty period will be.
This is a drastic change from the previous law, which is still in effect until October 1, 2020, in which an applicant could transfer assets one month and still be eligible for in-home Medicaid for the very next month. For individuals in dire need of Medicaid services, this change will be devastating.
Consider the time it will take to recover financial records going back 30 months in addition to the time it will take the Department of Social Services to review and process applications. Applications filed after October 1, 2020 are inevitably going to be much more complicated because of the additional financial information that is involved.
With the ongoing pandemic, it is important to consider future planning, including Long term care planning, disability planning and Medicaid planning. If a person wants to stay in his or her home and is considering applying for Community Medicaid, he or she should do so as soon as possible before the look-back rule takes effect. The closer one gets to October 1, 2020, the more likely one will face delays in processing the application.
Delays mean that families will have to pay privately for the crucial services Medicaid provides, which will no doubt present a serious financial hardship to countless families across the state. Additionally, those delays may potentially trickle down to caregiver applications as well, so it is also recommended to complete those in the near future too.
What is Medicaid?
Medicaid is a state and federally funded program that provides health care for official low-income persons of any age, even if such person has assets in trusts.
What is Community Medicaid and Chronic Medicaid?
Medicaid falls under two categories. Community Medicaid is designed to help participants live in their homes or assisted living facilities, if possible. It includes services like doctor visits, prescriptions, and over-the-counter medications, and transportation to medical care services. Chronic Medicaid covers nursing home care and all the services that entails. Since the costs are higher overall, the limits for eligibility are more rigorous.
The budget change does not apply to Chronic Medicaid, which still has a 60-month look-back period for applicants who are seeking full-time nursing home residency.
What are the Types of Medicaid Programs in New York?
New York state offers various Medicaid long-term care programs, each with different eligibility requirements, benefits, and services:
- Standard Medicaid: An entitlement, meaning anyone who qualifies will receive assistance that is provided in the home or at an adult day care.
- Institutional or Chronic Medicaid: An entitlement available in nursing homes only.
- Home and Community Based Services (HCBS): Only available to a limited number of participants, which is provided at home, at adult day care, or in an assisted living facility.
What are Asset and Income Eligibility Requirements?
All these programs have their own asset and income eligibility limits, and those vary depending on if the applicant is married and if his or her spouse is applying for Medicaid as well. The American Council on Aging offers a free and quick screening to determine if one is eligible for Medicaid. An elder law attorney can also help assess a person’s eligibility for Medicaid programs.
What are Considered Assets?
Many common assets or resources considered countable in other circumstances may be exempt when applying for Medicaid. Cash, investments, stocks, bonds, vacation homes, and checking and savings accounts are all countable assets. Personal belongings, household items, and burial funds are all exempt. The primary home is also exempt in most cases as well.
What is Considered Income?
From a Medicaid perspective, any income received from any source counts toward the total income limit. That can be everything from Social Security and pension payments to job wages and gifts. Whether or not a spouse’s income is counted as income depends on the type of Medicaid that one applies for. One does not have to count a spouse’s income for Institutional Medicaid or a Medicaid waiver.
If one is over the income and asset limits, there are other ways to qualify for Medicaid. A trusted elder law attorney can review the financial picture and recommend the next best step to take to improve one’s chances of receiving Medicaid benefits before the October 1, 2020 deadline.
There is Good News for Medicaid Participants
Fortunately, there is some good news in the 2020/2021 budget. Spousal survival, which allows the spouse who is not applying for Medicaid to retain his or her own income and assets, will remain, even if the Medicaid limits are exceeded. While this issue has been up for debate over the past few years, it fortunately survived elimination this time around.
Additionally, the amount a non-Medicaid spouse is permitted to retain in assets, which is called the spousal resource allowance, has remained the same at $74,820. A push to reduce that number to just over $25,000 was denied. This financial cushion is essential for couples who want to remain in their homes while receiving Medicaid, giving more New Yorkers access to benefits and services.
During this unprecedented time, it is important to plan for the future. Additionally, it is important to contact an experienced lawyer when planning long-term care. A lawyer is knowledgeable about the laws in place and will help protect the rights and goals of his or her client.
Brooklyn Elder Law Lawyers at Korsinsky & Klein, LLP Will Help You Protect Your Assets and Your Future
While the addition of a look-back period is concerning for many, you can take steps right now to protect your assets and remain eligible for benefits. Planning for long-term care can be complicated, so it is important to seek professional help. One of our Brooklyn elder law lawyers at Korsinsky & Klein, LLP will address your questions and assist you with your planning. For an initial, private consultation, complete our online form or call us at 212-495-8133. Located in Brooklyn, Manhattan, and Lakewood, New Jersey, we serve clients throughout New York and New Jersey.