With the skyrocketing costs of medical care and nursing homes, few people can afford to pay out of pocket costs to live in a long term care facility in their later years and most will eventually need to qualify for Medicaid to do so. Medicaid has essentially become the default funding source for for nursing home care and the long-term care insurance of the middle class in the United States.
Sources estimate that up to two-thirds of nursing home patients are covered by Medicaid, which was created to act as a safety net to the country’s poorest citizens. The definition of who qualifies as poor under Medicaid varies from state to state. In New York, individuals may only have up to $15,150 “countable assets” such as cash, stocks, bonds, investments, vacation homes, and savings and checking accounts to qualify for institutional or nursing home care. The spouse of the individual applying for Medicaid is allowed to have $123,600 in assets.
Certain assets are not counted towards these eligibility requirements. Some of the most important exemptions are the individual’s personal possessions like clothing and furniture, a single motor vehicle used for transportation, and the individual’s principal residence as long as he or she intends to return there at some point. For those over income an asset limits, New York does offer a variety of programs to help individuals qualify for Medicaid benefits.
New York also places limits on the amount of income the applicant makes each month. For individuals applying for nursing home care, that number is $842 per month. In cases where individuals have too many assets, it will be necessary to “spend down” these assets to qualify. However, like other states, New York has a “look back period” that can lead to Medicaid penalties if not enough time has passed since relinquishing the assets and applying for coverage.
There are a number of different ways to spend down assets and qualify for Medicaid. One common way is to place assets into a certain forms of trusts. It is important to note that if an individual enters a nursing home funded by Medicaid after the age of 55, the federal government will attempt to recover any assets in that person’s estate after passing away. However, in cases where one spouse lives the couple’s residence there will be no attempt at recovery until the second spouse passes away.