In this three-part series, we will go over the biggest changes in-depth, and even some of the proposed changes that are part of the multi-year action plan announced by the state.
Note: Medicaid Law Update – October 2021
New York finally adopted several regulations that imposed a major change in Medicaid eligibility. These regulations also introduced a “look-back” period into New York’s state’s Medicaid program.
A 30-month look-back provision gives the state the power to review the financial statements of anyone who is applying for home health care, private nurses, and other kinds of assisted living. By “looking back” at these records during the time period prior to their Medicaid application, the state can limit applicants’ eligibility.
Learn more about these changes if you’re planning to apply for Medicaid. Let our trusted attorney assist you with your Medicaid application.
Why the Changes?
The Fiscal Year 2020-2021 budget passed on April 3, 2020, and as part of the financial fallout from COVID-19 shutdowns, numerous government programs were altered for this upcoming budget year – one hit significantly was Medicaid.
Some of these changes are good, while others could be seen as negative. Medicaid is the state’s healthcare coverage, overseen by the federal government. It is provided to those classified as lower-income, and also helps those with disabilities. In some cases, Medicaid is available to the elderly using Medicare to help pick up costs not covered by the traditional Medicare program (e.g., nursing home care or community-based/in-home care). One important thing to note is that Medicare and Medicaid are not the same, and the changes in this series focus solely on Medicaid.
A lot of the coverage supplied via Medicaid was going to be cut from the budget to make up for losses from the pandemic, but the legislature fought and won to keep many provisions. However, some of the changes may significantly impact who qualifies for Medicaid for the rest of 2020 and 2021.
The Biggest Change: Medicaid Now Has a 2.5 Year Look Back Beginning October 1, 2020 for Community-Based Care
One of the more significant changes starts October 1, 2020, and impacts those seeking coverage for long-term care from the comfort of their home – known as community-based care. Because Medicare does not cover long-term care, many rely on Medicaid to help fill in the coverage gap.
Now, Medicaid will have a 2.5-year look back period for all individuals wanting to use their Medicaid coverage for long-term care through a home health aide. Look back periods always create delays in a person’s application, and now with a 2.5-year look back in place, the delay could be longer and force individuals to pay out of pocket for long-term nursing home care or forgo the care they need until they receive approval.
While 2.5 years is a lot, it is likely the lookback period would have been longer if the legislature did not act.
How Does the Look Back Period Work?
Similar to Medicaid coverage for nursing home care which is a 5-year period, the 2.5-year period will review all financial records for an individual applying for Medicaid to cover community-based care. Therefore, if you are hoping to enroll in Medicaid after October 1, 2020, for long-term care coverage, the Consumer Directed Personal Assistance Program will require that you provide 2.5 years worth of financial records. This can include:
- Checking and savings account statements;
- Retirement plan statements;
- Stipend or pension plan statements;
- Assets of record; and
- Records for any other source of income.
You will provide these to your Local Depart of Social Services (LDSS), and they will review those records while processing your Medicaid application for long-term care services.
Will the 2.5 Year Period Impact Eligibility?
Most likely, the 2.5-year period will impact eligibility just as the 5-year period does for nursing home coverage. Therefore, the LDSS may require a penalty period before Medicaid coverage will begin. If you have a penalty period applied, you must pay out of pocket until that period is over and eligibility applies.
The final bill is not yet clear on how the look back will impact those already receiving Medicaid for long-term care. If someone is already covered under Medicaid, one concern is that a new look back period will result in a penalty imposed after the fact, which may negatively impact a family’s financial situation if they have any transfers made for under market value.
Understanding Market Value Transfers
Market value transfers are what initiate a penalty period. For example, if you were to transfer property to someone under the fair market value, the LDSS sees this as an uncompensated transfer and creates a penalty period as a result. Many will transfer assets as a way to qualify for Medicaid, which is why the market value transfer period is in place.
Anything transferred under fair market value is presumed to be part of the penalty because they will assume that someone is transferring property or assets out of their name so that they will qualify for Medicaid. Unless you can provide a reasonable explanation (which is quite difficult) for the transfer, you will have a penalty applied.
The LDSS determines penalties the same as they do for nursing home applicants. Right now, the Western New York regional rate for 2020 is set at $10,720. If you make any transfers that are deemed uncompensated during the 2.5-year period, and they total $10,720 or more, you will have a one-month penalty applied.
That means you and your loved ones must pay out-of-pocket for long-term care for that one-month penalty.
Bottom Line: A 2.5 Year Look Back Period Will Greatly Impact Those Eligible for Medicaid Coverage
Unfortunately, most New Yorkers do not pre-plan for long-term coverage. Therefore, when they realize that they will need long-term care, they will begin transferring assets to qualify for Medicaid. With a 2.5 year look back in place, it will definitely impact individuals applying, as rarely will a person transfer assets years before they need long-term care.
Now Is the Time to Plan for Long-Term Care
Whether you are young and healthy or you are already retired, there may come a time that you need long-term care. With the future so unknown, it is best to plan ahead just in case. You can start planning for Medicare and long-term care coverage now using an estate planning attorney. An attorney will help you allocate assets and do so early on so that you are not affected by the 2.5-year, long-term care look back, or the 5-year, nursing home care look back.
To explore your options and start planning for long-term care coverage, contact the knowledgeable local attorneys at the Law Office of Andrew M. Lamkin, P.C. today. We can conduct a no-obligation video consultation so that you can remain in the comfort and safety of your own home. Call our office to get started or contact us online.
Andrew Lamkin is principal in the law firm of Andrew M. Lamkin, P.C., where he focuses his practice in the areas of elder law, estate planning and special needs planning, including Wills and Trusts, Medicaid planning, estate administration and residential real estate transactions. He is admitted to practice law in New York and New Jersey.
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