When You Need New York Medicaid Now: Crisis Planning to Help You Qualify

KEY TAKEAWAYS:

• It may not be too late to protect assets. A parent’s admission to a nursing home does not automatically eliminate Medicaid planning options.
• The five-year look-back matters. New York Medicaid can review certain transfers made during the 60 months before an application for nursing home benefits.
• Not every asset or transfer is treated the same. Some assets may be exempt, and certain transfers to a spouse or qualifying family member may receive special treatment.
• Rushed transfers can backfire. Giving away money or property without legal guidance may trigger a Medicaid penalty period and leave the family responsible for nursing home costs.

A long-term care emergency can happen when you least expect it, and if you haven't done any advance Medicaid planning, you may feel panicked, wondering how you’ll ever pay for the astronomical costs of a nursing home or an assisted living facility.

 While Medicaid can be a lifeline for your family, there are strict financial rules every applicant must meet, and trying to qualify in a time crunch can be daunting.

The experienced elder law and Medicaid planning attorneys at Landskind & Ricaforte Law Group, P.C. know that clients who face a sudden family health crisis can be overwhelmed and worried that they’ll lose their life savings and most of their assets attempting to qualify for Medicaid. But we also know that even in a crisis, you have options. There are last-minute strategies that could help you qualify for New York Medicaid while still protecting your assets. Here, we explain where to start.

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Medicaid Crisis Planning: What Is it?

Medicaid crisis planning is a process that includes strategies for crisis planning if a spouse needs Medicaid as soon as possible, helping your loved one qualify quickly when there is an urgent need for long-term care. Of course, it’s always best to plan ahead for this need, but that isn’t always possible. Life has a way of throwing a curveball, and you may need a nursing home or assisted living facility right away. Crisis planning aims to achieve some main goals:

1. Accelerate getting your loved one the care they need immediately
2. Protect as many of your assets as possible
3. Avoid violating the strict Medicaid rules that could trigger penalties

It's tricky to do this quickly and without early planning, but with the right tools and strategies, it can be done. The key is to act fast and get advice from our legal professionals who know the complexities of New York's Medicaid system and can guide you through the options and help you make the best choices for your family's unique situation.

Is it Too Late for Medicaid Planning After Nursing Home Admission?

No. Entering a nursing home does not automatically eliminate every opportunity to protect assets or qualify for Medicaid. New York Medicaid rules for nursing home care include financial eligibility requirements and a five-year look-back period, where Medicaid will scrutinize the financial and asset transfers you’ve made during that period. Here are transfers that may trigger a penalty and those that may not trigger a review:

Transfers That Trigger a Penalty

Certain asset transfers within the 60-month look-back period can impact your Medicaid eligibility. Understanding these transfers helps you avoid penalties and plan wisely to protect the resources you’ve worked hard to build. These include:

• Gifts to family or friends. Any transfer of cash, property, or other assets without fair compensation is considered a gift.
• Sales below market value. Selling property for less than its fair market value can trigger a penalty because the state views it as a partial gift.
• Transfers into trusts. Certain irrevocable trusts created during the look-back period can be counted as transfers of assets.
• Excessive asset reduction. Any significant reduction in countable assets, such as draining bank accounts or selling investments without receiving reasonable value, can trigger a review.

Transfers That Typically Don’t Trigger Review

Not all asset moves fall under the 60-month look-back scrutiny. Some are considered legitimate and don’t create penalties. These include the following:

• Transfers to a spouse. Moving assets to a spouse is always exempt, as Medicaid treats married couples differently.
• Transfers to disabled children. Assets given to a child with a disability are exempt in most cases.
• Caregiver child exemption. Transferring your home to an adult child who lived in the home with you for at least two years right before you moved to a nursing home, and who provided care that kept you out of a facility.
• Sibling exemption. Transferring a home to a brother or sister who already has an equity stake in the home and lived there for at least one year before you entered long-term care.

What You Can Reasonably Expect From Crisis Medicaid Planning

Crisis planning begins with the situation as it exists today—not the plan the family wishes had been created five years earlier. Our attorneys can examine what the parent owns, whether the parent is married, what transfers have already occurred, and which Medicaid rules apply.

Possible planning issues include:

• Reviewing exempt and countable assets. Medicaid does not treat every type of property the same way.
• Identifying permitted transfers. Certain transfers can receive special treatment under Medicaid rules.
• Protecting a spouse at home. When one spouse is institutionalized, Medicaid’s spousal impoverishment rules may allow the community spouse to retain specified income and resources rather than becoming impoverished to pay for care.
• Evaluating previous transfers. Gifts or transfers made before the nursing home admission need careful review.

Hiring our knowledgeable elder law and Medicaid planning attorneys will help you during the need for Medicaid crisis planning. They will review your parent’s assets and financial situation and determine how any transfers during the look-back period affects your eligibility for Medicaid.

Last-Minute Medicaid Strategies That Might Help You Qualify

Even if your loved one needs to qualify for Medicaid in a hurry, there are crisis planning strategies that could help protect your savings and assets without breaching the Medicaid rules.  Every situation is different, but here are a few techniques that might work for your family:

Medicaid-Compliant Annuities

An irrevocable Medicaid-compliant annuity (MCA) can convert countable assets into an income stream for the healthy spouse. It won't be counted toward Medicaid's asset limit for the spouse who needs care, but it gives the other spouse a source of support. Here are some important facts about MCAs:

1. An MCA lowers your assets, so one spouse can qualify for Medicaid benefits and the other can receive the annuity’s supplemental income.
2. You can use your MCA to get coverage for long-term care costs, which aren’t covered by Medicare.
3. There are asset and income limits, which can be altered by an annuity, that can potentially qualify or disqualify you for Medicaid coverage.

An MCA is generally recommended for people who have significant assets and want to protect them if long-term care is needed. However, the rules for Medicaid annuities are very strict and must be followed exactly. You should consult with our legal team to discuss the timing of establishing an MCA and whether it can help your emergency situation.

Caregiver Agreements

Personal Care Agreements are written contracts that establish the working relationship between a care recipient and their caregiver. These agreements provide Medicaid long-term care beneficiaries with proof that their payments to caregivers (including caregivers who are family members) have not violated any of Medicaid’s financial rules and won’t prevent them from qualifying for Medicaid. The agreement should contain certain elements, including the following:  

• Specific description of all services to be provided—this could include helping the recipient with eating, bathing, and dressing; cooking; housekeeping; laundry; transportation; and financial management
• How often services will be provided
• Location where services will be provided
• Caregiver pay rate and frequency of pay
• Start and end dates
• Termination clause
• Signatures

When you establish the timeframe for services, it’s helpful to write the terms with flexibility in mind. Using terms like “for a minimum of 25 hours a week and a maximum of 50 hours a week” can be helpful.  

Paying the Caregiver

The care recipient must pay the caregiver a reasonable rate for the Personal Care Agreement to meet Medicaid standards. If the pay rate is too high, it will look like the care recipient is giving away assets. Instead, the caregiver should be paid around the average rate a private personal care provider in the same geographic area would receive. It’s also important to remember that the caregiver can’t be paid retroactively for the agreement to be approved by Medicaid.

Details on When to Create a Personal Care Agreement

Ideally, the agreement should be created before any caregiver services are provided. This allows the payments to be made for future services only. If services are already being provided without a Personal Care Agreement, one should be drawn up as soon as possible. The care recipient should understand that any payments made to the caregiver before the Personal Care Agreement was created could violate Medicaid’s look-back period and lead to a period of ineligibility.

Legitimate Strategies for Spending-Down

You may be able to explore ways to spend down without incurring a Medicaid penalty in New York by using certain strategies with your excess assets. For example:

• Paying off debt
• Making home modifications for aging in place
• Prepaying funeral expenses
• Purchasing certain exempt assets

However, you need to be careful about last-minute spend-down. Medicaid has strict rules, and a misstep could cost you. Work with our knowledgeable attorneys to help ensure you're spending down assets in a Medicaid-compliant way.

The Most Important Step: Call Our New York Medicaid Planning Lawyers

Trying to handle a medical crisis that requires long-term care isn’t easy. Trying to navigate the Medicaid rules on your own can be disastrous. The rules are just too complicated, and the stakes are too high. If you get it wrong, your loved one could be denied coverage or face stiff penalties.b

Don’t go it alone. We can review your family's situation, identify the right crisis strategies, and help you implement them quickly and correctly. The sooner you call our Medicaid planning lawyers, the more options we’ll be able to discuss with you. With the right legal guidance, you may qualify for Medicaid without losing all of your hard-earned assets. Read our testimonials to learn how we’ve helped other clients with their crisis Medicaid planning.