New Yorkers looking into Medicaid may be aware of the 60-month (5-year) look-back period imposed on applications seeking coverage for nursing home care. What that means is that the Department of Social Services (DSS), which administers the program, will review financial records going back 5 years prior to the submission of the application to determine if the applicant transferred any assets. If DSS finds a gift or transfer was made which is not exempt or was not for fair market value, it will penalize the transfers, making the applicant ineligible for Medicaid for a period of time computed according to the size of the transfers (“penalty period”). Certain property is considered exempt as are certain transfers to spouses, minor children, disabled children and caretaker relatives.
Up to now, the look-back and penalty period did not apply to New York applicants seeking Medicaid for care provided outside a nursing home, including home care services and assisted living care. However, commencing on October 1, 2020, (unless delayed by the Commissioner of Health) as a part of the New York State Budget enacted on April 3, 2020, there will be a 30-month (2 ½-year) look back period for community based Medicaid. This change will have a significant impact on families who anticipate that a loved one will need home care or care in an assisted living facility in the next two years.
For any person who believes they will need community-based care or has a family member or loved one who may need such care and wishes to protect their assets, urgent and immediate action is required before October 1, 2020. The best methods for protecting assets would be a transfer of assets to a specific type of irrevocable trust called a Medicaid Asset Protection Trust and/or transfers of property outright to others (usually family members). If such transfers are properly performed before October 1, 2020 there should be no issue qualifying for Medicaid coverage of community-based care and the 60-month clock can begin on qualifying for nursing home care.
Many individuals may believe that, since they are married, they do not need act urgently because they can transfer assets to their spouse at the 11th hour and take advantage of the rules supporting spousal refusal. This is not a wise strategy. While, the new rules have left spousal refusal untouched, executing a spousal refusal gives the Department of Health, through DSS, the right to sue the refusing spouse for the value of the services provided by Medicaid. In recent years New York has been much more aggressive in pursuing spousal refusal cases.
Another part of the new law impacts the employment of family members (except spouses) or friends to provide home care and personal care services. Currently, to be eligible for the Consumer Directed Home Care Program (CDPAP), applicants must be medically stable, eligible for long term care and demonstrate a need for assistance with one or more activities of daily living (ADLs). A certification by their treating physician is considered sufficient evidence. Starting October 1, 2020, new applicants will have to prove the need for physical maneuvering with more than two ADLs. A person with a diagnosis of dementia or Alzheimer’s will be required to show a need for “at least supervision with more than one ADL.” Significantly, a certification by one’s treating physician will not be sufficient. The services will need to be prescribed by a qualified independent physician chosen by the Department of Health.
There are many rules and significant risks involved in proper Medicaid Planning. Benjamin Katz, Esq. P.C. offers a complimentary evaluation and consultation to determine the best course of action for you and your family. Don’t wait until it is too late.