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Community vs. Chronic Medicaid

Robin Burner Daleo • Mar 20, 2023

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.”

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May is National Elder Law Month

by Robin Burner Daleo • 03 May, 2024

May is National Elder Law Month, for that reason we have decided to switch from our normal format and answer a question that we are oftentimes asked in our practice, “What is an Elder Law Attorney and why do I need one?” Answer: Elder Law is a fairly new and unknown area of the law. As baby boomers and their parents’ age, they are living longer and oftentimes, living with chronic medical conditions. As the cost of long term care continues to spiral out of control and families struggle to meet the needs of their aging members, an experienced Elder Law attorney can help you and your family members establish an estate plan that maximizes protection of assets while ensuring that your loved one has the best care available to them should they face a health crisis. While it is always best to plan proactively, Elder Law attorneys are adept at crisis planning and oftentimes can provide a solution which can preserve assets or save taxes where others you have consulted have told you that no solution existed. Elder Law attorneys must be familiar with multiple areas of the law - contract law, estate planning, trusts and estate administration, Medicare, Medicaid, health care insurance regulations, Public Health Law, Mental Hygiene Law, the Internal Revenue Code & State and local tax issues. In each instance the issues that we deal with are fact sensitive and the clients must be willing to give us the information that we need to formulate the Elder Law plan. This in itself is oftentimes a struggle as the clientele that we deal with tends to value privacy and are oftentimes reluctant to divulge information regarding their assets and private family issues. The various disciplines that make up the Elder Law practice are in a constant state of flux. As a result, it requires the Elder Law attorney to spend a great deal of time reading current journals and cases and continuously taking legal education courses. In addition, many Elder Law attorneys meet in informal study groups to read, understand and strategize. As the facts change, there will likely be different solutions for each client. What works for one client may be totally inappropriate for another. For instance, in one day, we may see two different clients, both clients are 86 years old, own their own homes, and need long-term care. Client A has a daughter, age 55 and Client B has a niece age 55. Client A, on the eve of going into a nursing facility, is advised to transfer her home to her caretaker daughter, who lives with her and has lived with her for more than 2 years. The transfer does not make Client A ineligible for Medicaid. Client B cannot follow the same plan because her niece is not her child. There are no exceptions for transfers to caregiver nieces. Because we do not have an exempt transfer available to us for Client B I advise Client B to sell the home and advise her that even though no pre-planning has been done, we will likely be able to save more than sixty percent of her aunt’s assets by engaging in crisis planning. Remember - one size fits all – is not the rule. Your Elder Law plan is personal, fact sensitive and requires a careful review of all of the facts and circumstances. By: Robin Burner Daleo, Esq.