Gift Giving and Medicaid

How Will Giving Gifts Affect My Medicaid in New York?

If you are a senior or disabled individual receiving Medicaid in New York, your Medicaid eligibility is dependent on both your resources and income. It is also important to understand that nursing home Medicaid (institutional Medicaid) and homecare or (community Medicaid) have different thresholds for the resource and income criteria. For example, in 2019, the income limit for a single community Medicaid recipient  is $845 a month, however nursing home Medicaid recipients are only entitled to keep $50 of monthly income. Unlike many other Medicaid rules, this actually tends to make sense as all of a nursing home patient’s daily living needs are met by the nursing home (e.g. there is no need to pay for food, shelter, etc).

If you are already in receipt of Medicaid and live in the community, giving gifts will not affect your eligibility as we are assuming you have met the resource and income thresholds that permit you to receive Medicaid to begin with. If you are applying for community Medicaid and have made gifts or would like to make gifts, you will also not be penalized for making any gift transfers as long as you are applying when your resources and income meet the threshold levels. However, if you may be in need of nursing home/institutional Medicaid, you will be penalized for virtually any gift transfers in the 60 months (five years) immediately preceding your Medicaid application. The five boroughs in New York, as distinct from other counties in New York, will not look into or question any individual gifts or transfers that are below $2,000 . Nevertheless, it is not illegal for them to do so and the Human Resources Administration (HRA) that is responsible for Medicaid in the five boroughs of New York (“New York City”) may choose to change their policy on this. Another interesting caveat is that patterns of gift giving are not penalized in New York City. For example, if you have been giving your grandchildren $10,000 every year and it is clear that these gifts were a pattern before any need for a nursing home arose, then those gifts can be exempted from any penalty as well.

If you are penalized for an uncompensated transfer/gift, how does the penalty work? Medicaid calculates the penalty based on the average monthly cost of the nursing home in your county. For example, the average nursing home in NYC in 2019 costs approximately $13,000 per month. If you made a gift of $100,000 to a charity or an individual, and have applied for nursing home Medicaid within 60 months of making the gift, Medicaid will divide the value of the gift by the monthly cost of care: $100,000/13,000 =7.69. Therefore, Medicaid will not pay for 7.69 months of care and the applicant must pay such amount out of pocket. This rule too is quite logical as applicants are expected to use their funds for their care in lieu of gifting.

Medicaid rules and the application process are complicated. The Law Offices of Irina Yadgarova is equipped to help you navigate these rules and ensure Medicaid eligibility as well as the optimal preservation of your assets.