The cost of a Nursing Home in Long Island is generally $12,000 – $15,000 per month. This cost can deplete savings very quickly. As a result, proper planning is extremely important.
There are three ways to pay for a Nursing Home. First, one can use their savings. Clearly not a great plan – especially if your spouse must rely on that money to live. Second, one can purchase Long Term Care Insurance. Unfortunately, not many people can afford the premiums and the policies do not always cover the entire cost of care.
The third way to pay for Nursing Home Care on Long Island is Medicaid. Medicaid is a federal program which is administered by the States. In 2006, the Deficit Reduction Act of 2005 (DRA) was passed, making it more difficult – NOT IMPOSSIBLE – to qualify for Medicaid benefits. There are two ways in which the DRA made qualifying for Medicaid more difficult.
First, it extended a look back period on assets transfers from 3 years to five years. This means that when applying for Institutional Medicaid to pay for the Nursing Home, the local Department of Social Services will review your bank statements for the previous five years. If you have transferred any assets to a non spouse, they will impose a penalty period, during which the resident of the Nursing Home is responsible for payment. At the conclusion of the penalty period, Medicaid will “pick up” the cost of care.
The second way that the DRA affected eligibility is that he penalty period now begins when who enter the nursing home and apply for medicaid. Under the old law, the penalty period began when the asset was transferred. Therefore, under the old law, even if you made a large transfer within the 3 year look back, there is a possibility that the penalty period is over when you enter the nursing home. Under the DRA, the penalty period does not begin until one applies for Medicaid. Therefore, if there was a transfer of assets within the 5 years, there will always be a penalty period.
This does not mean that you cannot apply for Medicaid when you enter a Nursing Home. To the contrary it means that YOU MUST APPLY IMMEDIATELY because you want the penalty period to begin as soon as possible. Additionally there is a planning strategy that can cut the penalty period almost in half.
The above only applies to those who do not have spouses. If a Medicaid Applicant has a spouse, they can transfer their assets to the spouse and that transfer is not considered in the look back period – hence there would be no penalty period. The spouse simply signs a form called a “Spousal Refusal” and Medicaid will not impoverish the well spouse. There are certain limits to this, however. if the Community spouse has over $100,000 in assets, Medicaid can seek a contribution from them. Fortunately, the contribution is often minimal.
Proper planning can alleviate many concerns and protect assets against the high cost of care at Nursing Homes on Long Island. However, even if planning has not occurred, it is possible to protect some assets should you require Nursing Home Care. It is advisable to seek the advice of an Elder Law Attorney in Long Island as soon as your spouse or family member enters a nursing home. Getting a jump on the application process can save you a month or two of nursing home costs.
With questions about how to apply for Nursing Home Medicaid benefits, please call this office for a free consultation at 516-605-0625.