What Is Medicaid?
Medicaid is a joint program between the federal and state governments to help you pay for your medical expenses. Each state has its own plan, which the federal Department of Health & Human Services approves. New York offers funding for two types of long-term assisted care: community-based or institutional. Community-based Medicaid means the program will pay for a home health aide, housekeeping, and other services so you can stay in your home. Institutional Medicaid helps you pay for care in a nursing home.
What Do I Need to Qualify for Medicaid?
Because Medicaid is a “needs-based” program, you must pass the income and asset eligibility requirements. The state sets the income and resource limit each year. For 2021, New York automatically excludes applicants with assets above $15,900 for an individual and $23,400 for a family. For the most part, the state considers resources available to a spouse as also available to the applicant. Applicants 65 years old or older, blind, disabled, or applying for coverage of nursing home care must report all of their current assets. However, while you must report all of your assets, not everything is counted against the resource limits.
Medicaid Non-Countable Assets
Non-countable assets are things that hold value to the applicant that do not count toward the resource limit. An essential non-countable asset is your home. Your home remains a non-countable asset even if you move into a nursing home, so long as your spouse or dependent is living in the home or you have an intent to return. The idea behind this exclusion is that your home has a personal value beyond its resale value if you or your family use it as a home.
If you own other real property, the state will consider its value and impact on your income. The property’s equity value means the fair market value minus any encumbrances, for example, liens and mortgages. Property that produces income with a net return on equity of 6% or more is exempt up to the first $12,000. If the net return is less than 6% of the equity value, the state will count the entire equity value of the property as a resource.
The state also does not consider the value of household goods and personal effects, such as household furniture, appliances, family heirlooms, household tools, and equipment. In addition, the state does not consider your car if you or a family member are using it. If you have more than one car, the state will not count the second car if you have a medical need or use it for employment.
Finally, the state will not consider pre-need funeral arrangements so long as they are irrevocable. You can pay a funeral firm, funeral director, or undertaker in advance for your burial, and the state will not consider that agreement to be an asset. You may also set aside money in a separate account for a burial fund so long as the amount does not exceed $1,500.
Medicaid Countable Assets
Medicaid considers things that can be converted to cash to pay for your expenses to be countable assets. Countable assets include:
- Cash, checking, savings, credit union accounts, and certificates of deposits (CDs);
- Retirement accounts (deferred compensation, IRA, or Keogh);
- Life insurance policies with a face value over $1,500;
- A burial fund over $1,500 (or $3,000 per couple);
- Securities, stocks, bonds, and mutual funds;
- Trust accounts;
- Annuities;
- Vehicles other than your primary vehicle, including campers, snowmobiles, boats, and motorcycles; and
- Real property (other than that excluded above).
While this may seem like a simple list, it is not always straightforward. For example, assets in trust accounts or annuities are not always considered countable. If you exceed the resource threshold, the state will automatically disqualify you from coverage. It is a good idea to have a professional review your application, such as a legal practitioner experienced in elder law.
What Is the Lookback Rule?
New York’s lookback rule applies when the state considers your eligibility for nursing home care. The rule requires the state to “look back” for assets disposed of during the last five years. If you gave away any assets for less than fair market value, you might face a penalty period. During the penalty period, the state identifies you as ineligible for coverage for nursing home benefits.
What Is “Spending Down?”
Spending down is a plan to transfer your countable assets so that they will not count against your resource limit. Your plan can include more than medical expenses. For example, you might pay off debts, purchase a new non-countable asset, or improve a non-countable asset, such as your home or car.
How Can a Medicaid Legal Matters Lawyer Help?
An attorney experienced with Medicaid can review your assets and help you make a plan for spending down that will most benefit you, your spouse, and your dependents. At the Law Office of Andrew M. Lamkin, we understand the intricacies of Medicaid resources and know the differences between Medicaid countable and non-countable assets. Our clients have trusted us with planning for their future care for years. Contact us today so that we can help you qualify for the Medicaid benefits you deserve while protecting your assets and income for your family.
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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