New York State Medicaid is a joint federal and state program which provides medical assistance for those with low incomes and limited assets. It covers people who are eligible for public assistance or SSI (Supplemental Social Security Income). Income eligibility levels are $720 plus $20/ month and the asset threshold for an individual is $4,350 and for a couple $6,420. It is available to persons over 65 or who are blind or disabled and whose incomes are too high to qualify for public assistance or SSI but who spend down any excess income on medical costs until they reach the income eligibility level. It is critically important that if your planning on your own behalf or that of your older parents envisages Medicaid financing you should consult an Elder Law Attorney.
Medicaid financing is available for those in need of institutional nursing home placement who qualify under the income /resource thresholds or who spend down to those levels for medical costs. The primary condition for said support is that after February 8, 2006 a Medicaid recipient may not transfer assets to another person to render he or she eligible for Medicaid financing within five years of the date admitted to a nursing home without penalty. The penalty affixed is calculated on the total resources (on hand and that transferred) divided by the average monthly cost of a nursing home in the county wherein the applicant resides. For example, if one is admitted to a nursing home with an monthly income of $2500 and with less than $4000 in assets but who transferred $200,000 to his only son 12 months ago then the $200,000 ( falling within the 5 year
look back period) would be counted as the applicant's assets. If this person lived in Westchester county the penalty period would be calculated as follows: $200,000 divided by the average cost of nursing home care in that county or $9375 in 2007 which yields a figure of 21.37 months. Thus this applicant or would have to pay for his own care in the nursing home for approximately 22 months prior to being eligible for Medicaid financing. Once eligible $2450 of the $2500 monthly pension income would be directed to the nursing home and Medicaid would pay the nursing home $6925 for institutional care provided. Penalties do not begin to run until the applicant/recipient is in a nursing home, has exhausted all non-exempt resources and is otherwise Medicaid eligible.
The applicant could however transfer$102,000 of his assets to his wife bringing his asset base down to $102,000 and then the penalty or wait before Medicaid picks up financing would be approximately only 11 months. This is an exempt (non penalty incurring) transfer as long as the transfer is for the purpose of the spouses care. The applicant's home if jointly owned by his spouse is an exempt asset up to a value of $750,000. The spouse is not able to then transfer the $102,000 again without incurring a waiting period for the applicant's Medicaid support. The Community Spouse Resource Allowance is $74,820 or one half the couples resources as of the date of institutionalization to a maximum of $ 104,400. The Community Spouse is allowed to retain a monthly income of $2,610 unless a greater amount is established by the fair hearing or court order. If the community spouse has more than $2541 in income per month then Medicaid will suggest that he/she contribute 25% of the excess over $2,610 to the institutionalized spouse's medical care.
It is usually recommended that the community spouse sign a spousal refusal form which stipulates that the spouse will not be contributing to the institutional care of the recipient of Medicaid. Benefits must be granted the applicant in spite of this refusal but Medicaid reserves the right to pursue the non-contributing spouse for support in family court.
In reference to applications for community based Medicaid support transfers made during the 5 year "lookback" period do not accrue a penalty and thus a waiting period. However, income and asset thresholds must be met. This is an important distinction between home care and institutionalized nursing home care financing.
After reading this overview, please do not think you can do this yourself. Again, consult an Elder Law attorney who understands this most complicated issue.