What Can You Own in Medicaid in New York

To be eligible for Medicaid, one's property and monthly income must be within the limits provided by law and regulations. One's property and asset limits are different, depending on the type of individual. In New York, different monthly income and asset limits are provided, depending on the age, the household size, and the presence of disability or pregnancy. Generally, however, for individials who are age 5 or older, blind or disabled who want to receive institutional long-term care in a nursing home,

As of 2024, Medicaid eligibility in NY is crucial, and planning ahead is essential. Medicaid planning should begin well before the need for long-term care arises, as early planning allows for more options to protect assets and ensure eligibility. Procrastination can lead to rushed decisions and potential loss of assets. Various strategies exist to protect assets from Medicaid spend-down requirements, and proper planning can help individuals retain a portion of their wealth for family members. Consulting with an experienced elder law attorney is crucial for effective asset preservation.

NY Medicaid eligibility is generally means-tested, designed to assist low-income individuals with healthcare costs. Eligibility is determined by assessing an individual's income and assets, and exceeding income and asset limits can disqualify an individual from receiving benefits. Medicaid examines financial transactions made within five years of applying for benefits, known as the five-year look-back period. Gifts, transfers, and sales of assets below fair market value during this period may trigger penalties, resulting in a period of ineligibility for Medicaid benefits.

Individuals with assets above Medicaid limits must "spend down" to become eligible. Spending down involves depleting excess assets on qualifying expenses, such as medical care, and proper documentation of spend-down expenses is essential to avoid penalties. Strategies to preserve assets include irrevocable trusts, where assets placed in an irrevocable trust are generally protected from Medicaid spend-down. The individual creating the trust relinquishes control over the assets to a designated trustee, and trusts must be carefully drafted to comply with Medicaid regulations and avoid penalties.

Spousal refusal is another strategy, where a community spouse may refuse to contribute their income and assets toward the care of the institutionalized spouse. This strategy can help protect the community spouse's financial well-being, but the state may pursue legal action against the refusing spouse to recover Medicaid expenses. Medicaid-compliant annuities that meet specific criteria can be used to convert excess assets into an income stream. These annuities must be irrevocable, non-transferable, and provide equal payments over the annuitant's life expectancy. Naming the state as the remainder beneficiary may be required to avoid penalties.

Institutional Medicaid vs. Community Medicaid

New York's 2024 Medicaid income and resource eligibility caps for Nursing Home (Institutional) Medicaid are as follows: As of 2024, a single individual applying for Institutional Medicaid in New York is allowed to retain up to $28,134 in countable assets. If both spouses are applying for Institutional Medicaid, they may keep a combined total of $56,268 in countable assets. A single individual in a nursing home may keep up to $50 per month of their income for personal needs, with any income above this amount being contributed toward their care. The community spouse (the spouse not in a nursing home) may retain up to $148,620 in countable assets, known as the Community Spouse Resource Allowance (CSRA). The community spouse is entitled to a minimum monthly income of $3,715.50, which can be supplemented by the institutionalized spouse's income if necessary. The primary residence of a Medicaid applicant is exempt from being considered a countable asset if the equity value is less than $1,033,000, as long as the applicant or their spouse expresses an intent to return home or a dependent relative resides in the home. If the community spouse's income is below the Minimum Monthly Maintenance Needs Allowance (MMMNA) of $3,715.50, they may receive a portion of the institutionalized spouse's income to bring them up to this minimum level.

For Home Care (Community) Medicaid Income and Resource Limits in 2024, a single individual applying for Community Medicaid in New York may retain up to $28,134 in countable assets, while married couples with both spouses applying for Community Medicaid may keep a combined total of $56,268 in countable assets. As of 2024, a single individual receiving home care through Community Medicaid can have an income up to $1,563 per month. For married couples where both spouses are receiving home care, each spouse can have an income up to $1,563 per month, for a combined total of $3,126.

As of April 1, 2024, New York may implement a 30-month look-back period for Community Medicaid applicants. This means that financial transactions made within 30 months of applying for benefits may be examined to determine if any gifts, transfers, or sales of assets below fair market value occurred. Such transactions could result in a period of ineligibility for Medicaid benefits.

Your Elder Law and Medicaid Planning Attorney Can Help

Your elder law and Medicaid planning attorney can help navigate the complexity of NY Medicaid eligibility criteria, which involves numerous factors that impact eligibility, such as income and asset limits for both institutional and community Medicaid, exemptions for primary residence and personal property, and the look-back period for asset transfers and gifts. Medicaid regulations are constantly evolving, with rules and limits subject to change on an annual basis, and proposed changes, like the 30-month look-back period for Community Medicaid, can significantly impact planning strategies. Staying informed about the latest developments is crucial for effective planning. Medicaid planning often intersects with other areas of law, including estate planning, tax law, and real estate law, making it essential to understand the implications of Medicaid strategies on other legal matters and coordinate with professionals in related fields for comprehensive planning.

Protecting assets for over-resourced individuals can be achieved through various strategies. Irrevocable Medicaid Asset Protection Trusts can shield assets from Medicaid spend-down requirements, but the grantor must relinquish control over the assets, adhere to specific rules regarding trust income and principal, and create and fund the trust well in advance of the need for Medicaid to avoid look-back periods. Spousal transfers and spousal refusal allow the community spouse to protect a portion of the couple's wealth by declining to contribute their income and assets toward the institutionalized spouse's care, although this may lead to legal action by the state to recover Medicaid expenses. Medicaid-compliant annuities and promissory notes, when properly structured, can convert excess assets into an income stream or reduce countable assets, but careful attention must be paid to their terms and conditions to ensure compliance and avoid penalties.

Careful planning and document preparation are essential for effective Medicaid planning. Engaging in the process well before the need for long-term care arises allows for more options, flexibility, and ample time to implement strategies subject to look-back periods, while rushed planning can lead to costly mistakes and missed opportunities. Thorough documentation and record-keeping of all financial transactions, including gifts, transfers, and spend-down expenses, help demonstrate compliance with Medicaid rules, avoid potential penalties, and streamline the application process. Collaborating with experienced professionals, such as an elder law attorney specializing in Medicaid planning, ensures that strategies are tailored to the individual's unique circumstances, necessary legal documents are drafted, and coordination with financial advisors, tax professionals, and other experts creates a comprehensive plan addressing all aspects of the individual's financial well-being.

If you need a Medicaid planning attorney, you can call us at Law Offices of Albert Goodwin, PLLC at 212-233-1233