Medicaid in New York (last updated 6-2-23)
Medicaid is a collaborative state and federally funded health care program designed for low-income individuals across all age groups. While it covers various eligibility groups such as pregnant women, children, and the disabled, this article primarily addresses the long-term care Medicaid provisions available to New York residents aged 65 and above. Below are some things to consider when analyzing Medicaid.
Medicaid’s Look-Back Rule – New York has a 60-month Medicaid Look-Back Period for Institutional (nursing home) Medicaid that immediately precedes one’s Medicaid application date. During this period, Medicaid scrutinizes all asset transfers to ensure none were gifted or sold under fair market value. This includes transfers made by one’s spouse. The “look back” is intended to discourage persons from gifting assets to meet Medicaid’s asset limit. Violating the Look-Back Rule is cause for a Penalty Period of Medicaid ineligibility. Note that the Look-Back Period does not apply to Regular Medicaid. The U.S. Federal Gift Tax Rule, which in 2023, allows individuals to gift up to $17,000 per recipient without filing a gift tax return, does not extend to Medicaid eligibility. Giving gifts under this rule violates Medicaid’s 5-year Look-Back Period. An important change is coming; The Look-Back Period will be implemented for home and community based long-term care services. This is formally referred to as Community Medicaid in NY and includes home health care, adult day care, personal care assistance, and assisted living services. The “look back” will be 30 months (2.5 years) instead of 60 months as it is for Institutional Medicaid. The earliest the state plans to implement this change is March 31, 2024.
Here’s a breakdown of the Medicaid long-term care options for older New Yorkers:
- Institutional/Nursing Home Medicaid:
- Type: Entitlement program.
- Coverage: Exclusive to nursing home care.
- Eligibility: Any qualifying individual will receive support.
- Medicaid Waivers/Home and Community-Based Services (HCBS):
- Type: Non-entitlement program with limited participant slots; waitlists may be applicable.
- Objective: Designed to prevent premature nursing home admissions.
- Coverage: Services include at-home care, care in a relative’s residence, adult day care, and assisted living facilities.
- Regular Medicaid/Disabled, Aged 65+ or Blind (DAB):
- Type: Entitlement program.
- Coverage: Diverse long-term care options, such as personal care assistance and adult day care services.
Notably, Medicaid in New York can be referred to as Medicaid Managed Care. Additionally, the Medicaid for the Disabled, Aged 65+ or Blind (DAB) is sometimes termed NON-MAGI (Modified Adjusted Gross Income) Medicaid. All NY Medicaid programs adhere to federal guidelines but are overseen at the state level.
Overview of Medicaid Long-Term Care Eligibility in New York
The three categories of Medicaid long-term care programs in New York each come with their own set of functional and financial eligibility requirements. It’s important to note that financial criteria are updated annually and can vary based on one’s marital status. Further adding to the complexity, New York presents alternative routes for eligibility.
Quick Guide: Eligibility for a Single Nursing Home Care Applicant
For New York seniors to qualify for long-term care Medicaid, they need to meet both financial and medical prerequisites. Essentially, they should have restricted income and assets while also having a genuine medical need for care.
For a single individual aiming to access Nursing Home Medicaid in New York for 2023, the criteria are as follows:
- Monthly income below $1,677.
- Total assets not exceeding $30,180.
- A medical evaluation confirming the need for care equivalent to that offered in a nursing home.
Understanding Income Definitions & Exceptions for Medicaid
1. Countable vs. Non-Countable Income:
Most income types factor into Medicaid’s income threshold, encompassing employment earnings, alimony, pensions, Social Security Disability Income, Social Security Income, gifts, annuity payments, and IRA distributions. However, Holocaust restitution payments are exempt from this count.
2. Income Treatment for Couples:
If only one partner in a marriage seeks Nursing Home Medicaid or an HCBS Waiver, the income of the non-applying spouse isn’t considered. Additionally, to prevent financial hardship for the non-applying partner, referred to as the ‘community spouse,’ they are entitled to a certain monthly income minimum. In New York, this is known as the Community Spouse Monthly Income Allowance (CSMIA).
The CSMIA provision permits the applying spouse to allocate a portion, or sometimes all, of their income to their partner. For 2023, the CSMIA stands at $3,715.50. If the non-applying spouse’s income falls below this amount, they can be supplemented up to this level using the applicant spouse’s income. Conversely, if their monthly income is already at or exceeds $3,715.50, they aren’t entitled to the CSMIA. Any “surplus” income beyond $3,715.50/month may have 25% redirected to the applicant spouse’s care expenses. In such circumstances, the applicant spouse may invoke Spousal Refusal.
For Regular Medicaid/Disabled, Aged 65+ or Blind applications where only one spouse is applying, the combined income of both spouses is considered for determining the applicant’s financial eligibility. Notably, there’s no CSMIA provision for the non-applicant partner in this category.
Understanding Asset Definitions & Exceptions for Medicaid
1. Countable vs. Non-Countable Assets:
Countable assets, often termed resources, factor into Medicaid’s asset threshold. This encompasses cash, bank accounts (like checking, savings, and money market), stocks, bonds, investments, vacation homes, and any residual funds from Covid-19 stimulus checks. On the flip side, there are certain exempt or non-countable assets. Typically, these include one’s main residence, personal effects, household goods, a car, burial funds (up to $1,500) or a life insurance policy (with a cash value up to $1,500), non-refundable pre-paid funeral contracts, and IRAs and 401Ks if they’re in “payout status” (meaning the person is drawing the required minimum distribution).
2. Home Exemption Criteria:
For a home to be exempt for Nursing Home Medicaid or HCBS Waiver seekers, the applicant must either reside there or express an “Intent to Return”. As of 2023, their equity interest in the home should not exceed $1,033,000. Equity interest refers to the applicant’s share of the home’s equity (home value minus any mortgages). If the applicant’s partner is living in the home, the property is automatically protected, no matter what. For Regular Medicaid, there’s no upper limit on home equity interest.
However, a crucial distinction exists: while a home may be excluded from Medicaid’s asset calculations, it isn’t safeguarded from Medicaid’s Estate Recovery Program. After the demise of a long-term care Medicaid beneficiary, New York’s Medicaid agency may seek to recover care expenses from the deceased’s estate, which often involves the home. Without proper planning, this might mean the home is utilized to pay back Medicaid instead of being left to heirs.
3. Asset Treatment for Couples:
For married couples, all assets are conventionally deemed jointly owned, irrespective of which Medicaid program is sought and whether one or both partners are applicants. There’s a provision termed the Community Spouse Resource Allowance (CSRA) that safeguards a significant portion of a couple’s assets for the non-applying spouse in the context of Medicaid Nursing Home or HCBS Waiver applications. To prevent financial hardship for the non-applying partner, the CSRA for 2023 allows this spouse to retain half of the couple’s assets, capped at $148,620. If half of their assets total less than $74,820, the non-applying spouse can keep the entire amount up to $74,820.
For Regular Medicaid, while assets remain jointly considered, no CSRA exists for the non-applying spouse.
Medical / Functional Need Requirements
An applicant must have a functional need for long-term care Medicaid. For Nursing Home Medicaid and HCBS Medicaid Waivers, a Nursing Facility Level of Care (NFLOC) is required. This determination is based on an assessment of needs. Furthermore, additional criteria may need to be met for specific program benefits. As an example, for a Medicaid Waiver to cover the cost of home modifications, an inability to safely and independently live at home without modifications may be required. For long-term care services via the Regular Medicaid program, a functional need with the Activities of Daily Living may be required, but a NFLOC is not necessarily required.
Alternative Paths to Medicaid Eligibility for New York Seniors
For New York seniors who don’t meet the standard financial eligibility for Medicaid, several alternative pathways are available.
- Medicaid Excess Income Program:
- New York offers this program, sometimes termed as Spenddown or Surplus Income Program, to accommodate those exceeding Medicaid’s income limit.
- It’s designed for those with high medical expenses: excess income is allocated towards medical costs such as prescriptions, doctor visits, or medical supplies.
- Think of the difference between one’s income and the Medically Needy Income Level (set at $1,677/month for singles and $2,268/month for couples in 2023) as a deductible. After meeting this deductible, the individual qualifies for Medicaid for the rest of the month.
- The asset limit under this program is $30,182 for an individual and $40,821 for couples.
- Pooled Income Trusts:
- Designed for disabled New Yorkers with income above the Medicaid threshold.
- This trust, a variant of the “Supplemental Needs Trust”, allows depositing excess income, bypassing the need for the spend down described earlier.
- Funds in the trust, while exempt from Medicaid’s income consideration, are earmarked for specific uses, primarily to settle the bills of the Medicaid recipient.
- Asset Spend Down:
- If your countable assets surpass Medicaid’s limit, consider reducing your assets to qualify.
- Possible strategies include: settling medical bills (up to six years old), home safety improvements (like wheelchair ramps), prepaying funeral/burial costs, or repaying mortgages or credit card debts.
- Caution: Avoid gifting or selling assets below market rates, as this contravenes Medicaid’s Look-Back Rule, possibly triggering a Medicaid ineligibility period. Always maintain documentation of asset transactions to demonstrate compliance.
- Medicaid Planning:
- Often, people exploring Medicaid exceed its financial limits, yet can’t bear their healthcare costs.
- Medicaid planning assists such individuals. Through collaborations with Medicaid Planning Professionals, families can strategize to qualify for Medicaid and shield their homes from Medicaid’s Estate Recovery efforts.
- Connect with a Medicaid Planner.
Each situation is unique; always consider personalized guidance for your specific circumstance
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Medicaid in New York (last updated 6-2-23)