Are you preparing to apply for New York Medicaid, but wondering how that program’s five-year look-back rules might impact your eligibility? Our Tarrytown nursing home lawyer has the answers you need! For those who haven’t been following the trend in ever-increasing nursing home costs, the thought of one day finding themselves in need of government assistance for long-term care might seem strange indeed. And yet, that is precisely where many of us will find ourselves at some point in the future.
How expensive are nursing homes in New York?
Some of the latest estimates for nursing home costs in the state of New York suggest that residents can be faced with costs ranging from $304 a day to $415 a day. That means that your stay in a nursing home could cost you as much as $151,596 annually. Will your retirement income enable you to cover those costs? The fact is that very few people in New York – or anywhere in America, for that matter – have the ability to amass the type of savings needed for any prolonged stay in a nursing home. And if you think Medicare will pick up the tab, think again.
Medicare will probably not cover the cost of nursing home services
The reality is that Medicare won’t generally pay for long-term care. Neither will most health insurance options. And while you could opt for long-term care insurance, even that is not always a foolproof option. For most New York residents who need nursing care that they cannot afford on their own, the only viable option is Medicaid. That’s why more than seven out of every ten New York nursing home residents rely on Medicaid to help cover the costs of their care.
Qualifying for Medicaid coverage
Like many other government programs that rely on means-testing, the Medicaid program has strict eligibility standards. In the state of New York, residents must have annual income and savings that do not exceed the limits established by law. Moreover, all income other than a $50 monthly allowance for personal needs must be turned over to the resident’s nursing home to cover part of the cost of care. There are exemptions to the assets rules, of course.
Asset exemptions for Medicaid coverage
The resident’s homestead is exempt from consideration as long as the home’s equity does not exceed a specified amount and as long as he or she has declared an intent to return to it at some point. One automobile, life insurance policy, and burial fund can also be considered exempt.
All other assets must either be used to pay for care or transferred prior to the resident’s application for benefits. That latter option can be challenging for many seniors, due to the existence of Medicaid’s so-called “Look Back Period.” If you are getting ready to seek Medicaid benefits, or simply planning for a future time when those benefits may be needed for your nursing home care, then it is essential that you learn how the look-back provisions work.
How the Medicaid look-back period works
When you apply for Medicaid benefits, the state’s Department of Social Services is tasked with beginning a process wherein it examines your financial records for the five-year period prior to application. Throughout this examination, the Department looks for instances in which you made gifts or other transfers of assets during that five-year stretch of time. That penalty is determined by dividing the gift’s value by the average monthly nursing home care cost. The result of that calculation determines the exact number of months during which the applicant will be deemed ineligible for Medicaid assistance.
What does this mean for property transfers?
That, of course, means that any attempt to transfer your wealth months or even a few years prior to applying for benefits could render you ineligible for the program for a set period of time. It is important to keep in mind, however, that not every asset transfer triggers these penalties. You can, for example, transfer your home to one of your children, provided that the child lived with you for a minimum of two years and served as your caregiver. That home can also be transferred to a sibling as long as he or she is a co-owner, or to your own disabled or blind children. Finally, you can make transfers to your spouse without affecting eligibility.
Early Medicaid planning is important
According to our Tarrytown nursing home lawyer, the best option is to begin planning early so that the five-year look-back period does not become a problem for you later in life. And since most people do not have the time or inclination to learn about all of these complex rules and standards, it is important to rely on the services of competent estate planning attorneys who are committed to helping you navigate these challenging concerns.
If you have questions regarding the Look-Back period or any other Medicaid planning matters, please contact the experienced attorneys at the Law Offices of Mary A. Miller, P.C. for a consultation. You can contact us either online or by calling us at (914) 939-6565. We are here to help!