Medicaid offers many chances for nursing home applicants to preserve assets for themselves, as well as their spouses, children, and grandchildren. However, the rules can be quite difficult for the average person to understand. Consulting an experienced elder law attorney is the best way to protect the financial futures of everyone involved.
Understanding the Relationship Between Medicare and Medicaid
Medicaid should not be confused with Medicare, which is an insurance program for adults 65 years old and over and for certain individuals with serious disabilities. Medicare is available regardless of assets or income, but provides extremely limited coverage for long-term nursing home care.
Expenses that are not covered by Medicare must be paid out of pocket or through a private long-term care insurance policy. Since nursing home costs can run as much as $15,000 to $20,000 per month, even seniors with substantial savings can find themselves struggling to provide the care that is needed.
Medicaid is a joint federal and state program that pays for medical needs such as physician services, hospital care, and long-term care in a nursing home when a person does not have sufficient assets or income to handle these expenses on their own. Eligibility is determined independently in each state, although the basic eligibility standards are the same throughout the United States. In New York, the Medicaid program may be referred to as Medicaid Managed Care. Medicaid for the Disabled, Aged, or Blind (DAB) may be referred to as NON-MAGI.
Qualifying for Medicaid Coverage
A person with assets and income that exceed Medicaid requirements is expected to enter a nursing home as a private pay resident and "spend down" until they are eligible to receive Medicaid coverage.
Medicaid is widely considered to be one of the most complex government programs, but there are some general points to keep in mind as you are seeking coverage:
- There is a "look back" period where gifts given to heirs affects eligibility. This is to prevent people from simply transferring assets to their children to receive coverage. Selling assets cheaply triggers the same denial as gifting them to others. In New York, the "look back" period is 60 months (5 years) from the Medicaid application date.
- The applicant's home is excluded from asset calculations, but the estate can be billed for services provided after he or she has passed away. Other excluded assets include household contents, vehicles, prepaid burial funds, and IRA or 401(k) plans in payout status.
- When an applicant is married, both spouses' income and assets are considered even if only one spouse needs coverage. This is true regardless of any premarital agreements or conditional ownership of assets. However, a spouse who will be continuing to live at home is allowed to keep half of all of the available assets up to the current federally-established maximum with additional income for support expenses at home.
When an applicant does not qualify for Medicaid coverage due to income or assets, they may be able to receive Medicaid services via New York's Medically Needy Pathway. This program allows individuals to use income over the Medicaid eligibility limit to cover their medical bills. When their bills bring their income down to the eligibility limit, Medicaid coverage pays for additional expenses for the month.
How an Elder Law Attorney Can Help
Consulting an attorney is recommended if you are worried about Medicaid eligibility. Your attorney can prevent you from unnecessarily spending down assets, offer guidance on how to manage finances to preserve eligibility, and prepare the application on your behalf.
Applications for Medicaid are often initially denied, but there is an appeals process built into the system that includes an administrative hearing and court proceedings to protect the rights of vulnerable seniors. An attorney with experience in elder law can protect your rights when your application has been denied.
Landskind & Ricaforte Law Group, P.C. offers personalized estate planning services to the pre- and post-retirement community, including Medicaid planning for individuals concerned about the cost of nursing home care. Call today to learn how Renata Landskind, Esq. and Terence J. Ricaforte, Esq. can help you receive the care you need. Appointments are available in our Brooklyn office by calling 718-333-5007. We also are available to meet in Staten Island, Queens, Long Island, and throughout New York City.