If you’re a New Yorker with a loved one who’s 65 and has long-term health care needs, your Medicare insurance won’t provide financial support should they need a nursing home or assisted living facility. Instead, you may look to cover those costs using Medicaid.
Medicaid is a health insurance program that pays for long-term care should a patient become ill, disabled, or incapacitated. To be eligible for this program, the applicant must have limited income and assets. For example, in New York, for a single person to qualify for assistance, Medicaid sets an earning limit of just under $900 a month. Anything above this is considered excess or surplus and must be reduced or “spent down” before Medicaid provides aid. Additionally, that person can’t have more than $16,800 in assets—this includes savings and checking accounts, cash, stocks, insurance policies, and investments.
To ensure that applicants don’t give away money or assets to qualify, Medicaid implemented a “look back” period—a timeframe during which the agency reviews all the financial transactions and asset transfers made by the applicant. If Medicaid finds that the applicant gave away money and/or assets to appear that they have fewer financial resources than they really do, it imposes a penalty period for some months or years, during which the applicant can’t receive Medicaid assistance.
Here’s what else the elder law professionals at Landskind & Ricaforte Law Group P.C. think is important to know.
Medicaid’s Look Back Period in New York
Currently, New York doesn’t have a Medicaid look back period but will implement one starting in March 2024. The state has proposed a 30-month transfer of assets look back period for coverage of community-based long-term care (CBLTC) services, and 5 years for nursing home care. The new rules take effect March 31, 2024. People who apply for community-based Medicaid after October 1, 2022 are required to disclose earlier financial transactions.
In general, Medicaid investigates to determine if you gave away money or resources to friends or family as a way to reduce your total assets. For example, if you gave your nephew $20,000 within the last five years, Medicaid flags this as a strategy for reducing your total assets to qualify for benefits. The agency knows that after the look back is complete, your nephew could return that money to you. Medicaid also examines if you transferred assets below fair market value—such as a second home, an extra car, or properties.
Community-Based Services Impacted by New York’s Medicaid Look Back Rule
If you’re an individual seeking Medicaid coverage, there are numerous community-based long-term care services that will be affected by the Medicaid changes, including.
- Assisted living programs
- Personal care services
- Adult daytime health care
- Certified home health agency services
- Consumer-directed personal assistance programs
- Private nursing care
- Limited licensed home care services
Look Back Exceptions
There are exceptions and exemptions to the look back rule if you’re a family in a difficult situation. If you’re an applicant who falls under any of these exceptions, you may be allowed to transfer assets during the look back period and not receive a penalty. However, the options and rules for these exceptions are complicated and confusing.
For example, an applicant can transfer up to just under $150,000 to their spouse, so long as the spouse isn’t applying for long-term care and will live independently within the community. That’s why it’s important to hire an elder law and Medicaid attorney to help explain the details of these exemptions for both an individual and a married couple.
Work With Us to Create or Review Your Estate Plan
If you live in New York and need long-term health services through Medicaid, it’s important to talk to an elder law attorney to discuss the changes being made by Medicaid to maximize your asset protection and avoid any penalties. It’s not easy to navigate Medicaid paperwork and understand the requirements of the program.
If you have an estate plan or need to create one, now is the time to consult with the elder law and Medicaid planning attorneys at Landskind & Ricaforte. Existing plans should be updated to help ensure Medicaid coverage if you can’t spend down your assets. If you don’t have an estate plan, we invite you to visit our office to discuss estate planning and what you can do should you need Medicaid in the future.