Asset Protection/Medicaid Planning
The Deficit Reduction Act of 2005 brought sweeping (and for the most part unfriendly) changes to Medicaid and its qualification guidelines. In the event an individual needs long-term care, including nursing home (not including certain types of homecare), effective planning is extremely important. The monthly regional rate for nursing home care in the Central New York area in 2014 is $9,252.00/month (private pay is significantly more expensive). What does this mean to someone needing care? An individual or married couple could spend several hundred thousand dollars - likely most or all of their assets on nursing home care without proper planning (as Medicaid would deem the individual ineligible-resource limits for eligibility are discussed below).
Medicaid is a joint federal, state and city program; it is need-based meaning it is available to those individuals with low incomes and limited assets. There is absolutely no age restriction for qualification. In order to qualify, you must submit a detailed application and provide detailed financial records for the previous 60 months - this is known as the "look-back period".
Where an individual is single and in need of nursing home or other qualifying long-term care, that individual is allotted certain resource and income maximums-amounts above those limits would create Medicaid ineligibility (requiring that person to 'spend down') an otherwise eligible applicant/recipient ("A/R"). For 2016, the limits are as follows: a) resources of the A/R: $14,850.00; b) monthly income of the A/R: $50.00. If you are married, the community spouse ("CS") is allotted the following amounts: a) resources of the CS together with the A/R: $74,820.00 (*the CS is permitted to retain resources in an amount equal to the greater of the following: $74,820 or the amount of the spousal share up to $115,920.00. This share is the amount equal to one-half of the total value of the resources of the couple as of the beginning of the most recent continuous period of institutionalization of the A/R); b) monthly income of the CS: $2,898.00 (see NYS DOH - Medicaid Publications).
The above resource and income amounts are applicable to any resources not considered exempt such as the homestead and certain IRAs in regular payout status. The homestead is the primary residence occupied by an A/R and/or family members (spouse, minor children, certified blind or certified disabled children, and other dependent relatives). The exemption is limited to $750,000 of equity. It should be noted that there is no cap while a spouse, child under 21 or disabled child of the A/R is resides in the home.
The above is a brief overview of some of the rules of Medicaid and the impact of DRA 2005. Too often productive people who have worked their entire lives as responsible members of the community are forced to spend a lifetime of savings in order to obtain proper care. We welcome the opportunity to help you preserve your estate for the benefit of those you intend.
Asset Protection / Medicaid Planning areas include:
- Long-Term Health Care Planning
- Medicaid Applications
- Medicaid/Irrevocable Income Only Trusts
- Supplemental Needs Trusts (Third Party and Self-Settled)
- DRA Compliant Promissory Notes
- General/Limited, Durable/Non-durable Powers of Attorney
- Living Wills and Health Care Proxies