How Gifts of Money Can Affect 2011 Medicaid Eligibility for Nursing Home Care in New York State

Medicaid Supervisor for Ettinger Law Firm, Elizabeth Schalk, has been reviewing Medicaid applications for over fifteen years. Having worked in this capacity for a nursing home and an elder law estate planning law firm, Schalk has gained valuable insight and experience from counseling New York State residents in various counties about receiving Medicaid assistance.

“The most frequent thing I see is when someone’s mom or dad is sick and s/he knows it will be a short time before his/her parent will have to go into a nursing home. All of a sudden, money gets transferred out of the sick parent’s resources. The thinking behind this is that that this will make his or her parent eligible for Medicaid to pay for nursing home costs. Nothing can be further from the truth. In fact, these kinds of “gifts” can cause a delay in Medicaid benefits.”

When a person transfers assets and then receives or applies for Medicaid-covered nursing home services, the local New York Department of Social Services ”looks back” at financial transactions made within 60 months or five years from the first date on which the person was subsequently institutionalized and applied for Medicaid coverage.

A person in a nursing home or receiving equivalent services in a hospital is made ineligible for Medicaid coverage for a period of time after a gift or transfer of resources by the person or his or her spouse.

The person is ineligible for a period equal to the value of the resource divided by the average cost of nursing facility services to a private patient in the community.

The penalty period is based on the total amount of transfers and/or gifts divided by the New York State Regional rate set for each county by the NYS Department of Health in January of each year. The length of the ineligibility period is calculated by dividing the total, cumulative, uncompensated value of the transferred assets by the average monthly cost to a private pay patient of nursing home care in the applicant’s geographic area as of the date of the application for Medicaid.

In New York City the average cost for nursing facility services for 2011 is presumed to be $10,579.00 per month. In Dutchess, Orange, Putnam, Rockland and Westchester counties it is $10,105.00. In Albany and surrounding counties it is $8,323.00.

If gifts are made into a special needs trust, an applicant may be exempt from the five year look back period penalty. Or, if gifts are a normal gifting pattern such as the same gifts each year for Christmas and written verification can be provided prior to the look-back period, these kinds of gifts often cannot be counted as a transfer for Medicaid purposes.

Before gifting or transferring money out of an estate, and especially if a nursing home is imminent, consulting an experienced New York elder law attorney with an on-staff Medicaid supervisor may assist in avoiding unnecessary delays in receiving state assistance.

written by A.K. Lehmann, ABA Paralegal

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