Prior to October 1, 2020, a person in need of Community Medicaid (meaning Medicaid that covers home care and all medical expenses for a person not living permanently in a nursing home) can become Medicaid eligible by transferring assets or establishing various trusts. A critical change in New York law is taking place effective October 1,2020 \u2013 from that date forward, Medicaid will \u201clook back\u201d at all transfers\/gifts made within 30 months of a Medicaid application. \u00a0\u00a0The look back rules are similar to the current nursing home Medicaid eligibility rules that require a 60 month look back for nursing home\/institutional Medicaid.\u00a0 \u00a0The new community Medicaid 30 month look back period means that any non-exempt transfers (to be explained below) within two and a half years of applying for Medicaid will be penalized.\u00a0 The penalty means that the value of the asset transferred\u00a0 is divided by the regional cost of chronic care (approximately $13,000 per month in New York); the resulting number represents the time period Medicaid will not provide coverage.<\/p>\n
To illustrate,\u00a0 let\u2019s take a simple example of Ms. Smith who is 65, not married, and retired; she has $250,000 in the bank and gives $240,000 \u00a0to her child as a gift in April 2020, leaving her with a balance of $10,000. \u00a0\u00a0In the year 2020, Ms. Smith would be eligible for Medicaid if she had less than $15,850 (not including retirement accounts; also, for purposes of this example, we will ignore Ms. Smith\u2019s retirement income such as social security and pension).\u00a0 If Ms. Smith applied for Medicaid after transferring the money to her daughter but before October 1, she would be eligible.\u00a0 However, if Ms. Smith applied on or after October 1, Ms. Smith would not be eligible until her penalty period elapsed.\u00a0 How long is her penalty? We divide the value transferred ($240,000) by the regional rate ($13,000) and the result is 18.46\u2014meaning that Ms. Smith would not be eligible for Medicaid for almost 19 months!<\/p>\n
The new law surrounding Medicaid eligibility requires much clarification from the legislature and much remains unknown. For example, will the use of Medicaid Asset Protection Trusts for personal primary residences be permitted without a lookback and penalty? Will Pooled Trusts currently used to shelter excess monthly income be penalized or will they continue to be an effective Medicaid planning tool? Will the new 30 month lookback law be grandfathered in to exempt those already receiving Medicaid? \u00a0\u00a0What is crystal clear, however, is the need to act now.\u00a0 The need to protect your assets from medical bills has never been as pressing and urgent as today.<\/p>\n","protected":false},"excerpt":{"rendered":"
Prior to October 1, 2020, a person in need of Community Medicaid (meaning Medicaid that covers home care and all medical expenses for a person not living permanently in a nursing home) can become Medicaid eligible by transferring assets or establishing various trusts. A critical change in New York law is taking place effective October … <\/p>\n