Medicaid

CHANGES IN MEDICAID ELIGIBILITY! In February, 2006 the federal government passed legislation that radically affects Medicaid. This new law primarily affects eligibility for Medicaid institutional care (nursing home care). The law extends Medicaid's "lookback" period for all asset transfers from three to five years. In addition, people who have more than a $500,000.00 equity interest in their home will be ineligible for Medicaid nursing home coverage (New York State has raised this to $750,000.). The most significant change affects the start of the penalty period for transferred assets.
What is Medicaid? Medicaid is a health care program based on both federal and state law for persons over 65 years old, there are strict financial eligibility requirements, whereby one must have income and resources below a specified amount.
Does Medicaid give home care and nursing home care? New York State Medicaid includes home care and institutional care (nursing home). Medicaid home care and institutional care both have specific income and resources rules for the applicant and his/her spouse. The eligibility rules differ for each type of care.
What determines eligibility for Medicaid Home Care? Briefly, eligibility is based on medical need and the income and resources of the applicant and his/her spouse. At this time there is no penalty for transferring/gifting assets.
What determines eligibility for Medicaid Institutional Care? Medicaid institutional care has complex rules regarding making gifts or transferring assets. When reviewing an application, Medicaid requires the applicant to submit bank and brokerage statements for the past 60 months. Medicaid uses the financial information to determine current financial eligibility and whether there have been uncompensated transfers or gifts during the look-back period.
There are also penalty periods that are based on the average nursing home rate in the area.
Our office can explain the complex eligibility criteria and help the applicant to meet these criteria. Recommendations will be based on the financial and health care needs of the applicant and his family.
Tip: There are some transfers and gifts that Medicaid considers exempt. It is important to determine whether a transfer you are considering or you have made falls into this group.
My father heard that annual gifts of $12,000.00 are exempt. Are these gifts considered exempt transfers by Medicaid? No. Although these gifts are exempt from estate taxes, Medicaid does not regard them as exempt transfers.
What information is it important to have when discussing Medicaid eligibility?. When you make an appointment with an Elder Law Attorney to discuss Medicaid eligibility, be sure to bring the following information on the applicant and spouse: Current Planning Documents: Will, Trust, healthcare proxy, living will, power of attorney Income: including currents earnings, social security, pension, and other Resources: bank & brokerage accounts, retirement accounts, etc. and how each resource is titled Life Insurance including face value and cash surrender value Medical Insurance Premiums Long-Term Care Insurance Policy Real Property Information: information on primary residence and second home, including value and how properties are titled Transfers: gifts over $500.00 made during the past five years, including date and to whom made Advance Funerial and Burial Arrangements
My father receives Medicaid and he just was notified of an unexpected inheritance? Consult an attorney immediately - - before your father takes control of his inheritance. Our office has been successful in arranging for Medicaid recipients to enjoy the benefits of an inheritance without losing Medicaid eligibility.
COMMENTS: Our office regularly meets with seniors and their adult children to discuss how they will cope with the financial burdens of home care and nursing home care. The sooner this type of planning begins, the more options there are to provide adequate care while preserving assets.
An Example: Soon after Mary was diagnosed with Alzheimer's Disease, she and her children met with me. At our initial meeting we developed a plan for Mary to make gifts to her children. Mary was able to live independently for two years. When she needed home care it was provided by Medicaid. At the end of five years, when Mary could no longer be cared for at home, she was eligible for Medicaid institutional care.