As our population ages, worries about caring for our parents (not to mention ourselves), grow in importance. On October 1, 2020, New York will impose new restrictions on the eligibility for community Medicaid. This is a major change in the law. Before October 1, eligibility for such home care services was not subject to restrictions on the amount of property or assets a person had. Soon there will be restrictions in place.
Community Medicaid (care at home) and Institutional (or Chronic) Medicaid (care in a nursing home) are two different things for New Yorkers. Home care services were always relatively free of financial limits and restrictions while nursing home care was not.
The law provides several opportunities for Medicaid planning for government-subsidized nursing home care even for people who have (or had – the distinction is important) significant assets. Medicaid is a program originally designed to assist low-income seniors with limited assets to afford health care and long-term care, but with proper planning a wider range of people can become eligible for its benefits.
In order to qualify for Medicaid nursing home assistance, a person’s possessions may not exceed certain maximum income and assets levels. Reducing one’s assets in the proper manner is the key to making a person eligible for Medicaid nursing home benefits. However, a person generally cannot transfer all his or her assets to a family member and then the next day apply for Medicaid nursing home assistance. Generally, if a senior applies for Medicaid nursing home benefits and is deemed to be otherwise eligible at that moment but is found to have gifted assets within five years from the application then that senior will be disqualified from receiving benefits for a certain number of months. This is referred to as the Medicaid penalty period.
The rules were very different for Community Medicaid (care at home). Until now.
In the past, New Yorkers were generally entitled to a variety of home-based assistance under the State’s Medicaid rules even without showing financial need.
Here is the news you should know now. Starting on October 1, 2020, most asset transfers you make for up to thirty (30) months before application for Medicaid home care benefits will be counted for eligibility for various Medicaid home services. This is a major reduction in benefits.
The new thirty (30) look-back period will be phased in between October 1, 2020, and April 2023, so the impact of the new law will be softened.
The law applies to home health care services, private duty nursing services, personal care services and assisted living program services. In order to obtain any home care services, an applicant and their spouse will need eventually to submit records of financial information for the thirty (30) months before the application. (Spousal Refusal rights remains intact, along with Parental Refusal, and there are transfers exempt from the new law as they may be for nursing home expenses but a discussion of these techniques is beyond the scope of this article.)
The “take away” from this? Consult an attorney with experience in estate planning and elder care planning for advice now.