New York is one of three states that provide a Medicaid planning option known as “spousal refusal.” Essentially the option provides a way for a healthy spouse to save assets and income beyond that originally exempt from Medicaid while still having an ill spouse receive necessary long-term care under the New York Medicaid program. Our New York Medicaid attorneys have helped many families plan in just this way. We often advise clients that there are some potential complications following use of this tool–like a possible lawsuit from the Department of Social Services. However, regardless of the risks, for a variety of reasons the spousal refusal option is a prudent tool for families in many different situations.
However, there is a chance that spousal refusal may not be available to couples in the future. That is because New York Governor Andrew Cuomo recently proposed removing the spousal refusal option in the state. Financial concerns are driving this plan. Some estimates suggest that $34 million a year may be saved by eliminating the state’s spousal refusal.
Many senior advocates have voiced fierce opposition to the proposal, suggesting that the cost to local families would be devastating. Assemblywoman Nicole Malliotakis–a member of the Assembly Committee on Aging–explained that the proposed policy change would force some couples to lose everything that they have built up over a lifetime. Forcing healthier spouses to spend down their assets may have serious adverse effects on the healthy senior’s own well-being. That individual may then require even costlier care themselves than if they had been allowed to keep their assets instead of losing them so their ill spouse qualified for New York Medicaid.
In that way, some are suggesting that the potential cost savings are illusory. Instead, Assemblywoman Malliotakis is suggesting that focus remain on eliminating the estimated $5 billion in Medicaid fraud.
Perhaps most alarmingly, without the spousal refusal option some senior couples may be incentivized to divorce in order to save assets while still allowing their loved one to receive necessary long-term care. The director of the New York-based Center on Marriage and Families editorialized this week against elimination of the spousal refusal. She noted that she has seen a trend in senior couples divorcing because of these issues in states across the country. Without preservation of the spousal refusal option, “forced divorces” may become common in our state. Pledging to fight the proposal, she concluded that “those who will really suffer under the governor’s proposed changes are elderly middle and low-income New Yorkers, people who worked hard all the years they were healthy and should not callously be forced into divorce.”
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