Community vs. Chronic Medicaid
As people age, the cost of long-term care can become a glaring reality. With the cost of nursing home care at approximately $15,000.00 per month and the cost of 24-hour care in your home at approximately $8,000.00 per month, assets can be depleted quickly. Fortunately, the Medicaid program covers the cost of long-term care, whether in a nursing home facility or in your home.
COMMUNITY MEDICAID
Community Medicaid is the program that covers care at home. This program covers the cost of a personal care aide to assist with activities of daily living such as bathing, cooking, dressing, etc.; day programs, transportation to medical appointments, assisted living programs, and some durable medical equipment and supplies.
For 2023, an individual applying for Community Medicaid can have no more than $28,133.00, not including their home, in resources and no more than $1,563.00 in income. Resources include almost any asset whether real estate, bank accounts, investment accounts, or annuities. Qualified funds such as IRAs or 401(K)s are exempt, but the applicant is required to take periodic distributions which are counted as income each month. While these limitations may seem daunting, the good news about Community Medicaid is that, for current applicants, there is no look-back period. That means someone looking to get care at home can transfer assets in one month and be eligible for Community Medicaid in the following month. There is no penalty for transferring assets. However, a law was passed in April of 2020 which would implement a thirty (30) month lookback on asset transfers for Community Medicaid applications. The New York State Department of Health informed the public that the earliest the State will seek to implement this lookback is March 31, 2024.
Moreover, an individual can opt to use a pooled trust or a transfer some of their excess income to a spouse. Excess income would be paid to a pooled trust company and the trustees of said trust would pay expenses for the benefit of the applicant. For example, if the applicant had $2,563.00 in income, they would keep $1000.00 and the balance of $1,563.00 would be sent to the pooled trust. The applicant would submit household bills to the pooled trust requesting payment using the applicant’s excess income.
CHRONIC MEDICAID
Chronic Medicaid is the program that covers nursing home care. The resource eligibility level is the same as the Community Medicaid program; that is $28,133.00. However, any income over $50 must be paid to the nursing home facility. If the applicant has a spouse, the spouse can keep up to $3,715.50 in total income.
Unlike Community Medicaid, Chronic Medicaid has a five-year look-back. The “lookback” refers to the period of time that the Department of Social Services will review your assets and any transfers that you have made. To the extent that the applicant has made transfers or has too many assets in your name to qualify, they will be ineligible for Medicaid until the excess resources are spent down for their care. However, there are some exempt transfers that the applicant can make which will not render them ineligible. For example, if the applicant is married, everything can be transferred to the well spouse, including the house which is exempt if the well spouse resides there. Currently, the regulations that that once all the assets are transferred to the well spouse, they can keep $148,620.00 plus their residence. To the extent that they are over resourced, the spouse would have to sign a spousal refusal wherein they state that they cannot contribute to the cost of care for their spouse, and the Department of Social Services must give the applicant Medicaid. However, there is a catch. While the Department of Social Services must give the applicant Medicaid, they can sue the over resourced spouse for contribution.
In addition to transfers to spouses, applicants with excess resources can also transfer certain assets to a disabled child, siblings with ownership interest in real property, caretaker children and prepay their burial. If even after spend-downs and transfers, the applicant is over-resourced, emergency planning can be down to preserve at least half of the assets.
Medicaid is a complicated program, and the rules are ever-changing. Before applying for any Medicaid program, be sure to consult with an expert. As we always tell our clients, “this is not something you should try at home.”
