Medicaid is a federal and state program that helps people with limited income to afford their essential healthcare needs. Compared to Medicare, Medicaid also provides funding for nursing home care and personal care services. Medicaid is the largest provider of medical and health-related funding for individuals in need. As of July 2022, it is estimated that almost 90 million individuals, or almost 27% of Americans, have enrolled and availed of Medicaid benefits.
As a means-tested program, Medicaid applicants are commonly subjected to strict eligibility criteria before they can avail of benefits. The requirements are almost prohibitive and may require applicants to spend or give away some of their assets just to qualify for the program. However, with the help of an experienced Long Island Medicaid planning attorney, you may be able to retain eligibility while being able to keep your assets. Additionally, a skilled Medicaid planning lawyer can assist in developing a plan that considers the Medicaid estate recovery program and may help minimize the impact of estate recovery on the individual’s assets and their beneficiaries.
What Benefits Can Medicaid Pay For?
New York’s Medicaid program pays for a wide range of services. Medical coverage is often covered through the use of a Medicaid card or a managed care plan for those enrolled in care facilities. Generally, the services that Medicaid provides can be divided into three:
- Community Medicaid – covers hospital and doctor visits including lab tests and prescription medication
- Community Medicaid with Long-Term Care – long-term care under Medicaid includes different types of services such as medical, social, housekeeping, and rehabilitation. These services can be provided in nursing homes, patients’ residences, and assisted-living facilities
- Nursing Home Medicaid – services provided by medical facilities certified by state survey agencies as Medicaid Nursing Facilities
- Skilled Nursing
- Rehabilitation – post-hospital care needed due to injury, disability, or illness
- Long-term care – healthcare services above the basic room and board
What Are the Eligibility Requirements for Medicaid on Long Island?
People under the following categories are eligible to apply for Medicaid:
- US nationals, citizens, green card holders, or legal aliens
- People under 21 or older than 65
- People who are above the age of 21 may be eligible for Medicaid if they are pregnant, responsible for a minor, blind, have a disability, or have a household member with a disability
In addition to the eligibility categories, Medicaid applicants must also pass a means test, meaning their annual household income would be evaluated by the state. The applicant must be able to prove that they do not have the financial ability to pay for Medicaid out of their pocket.
What Is the Medicaid Look-Back Period? Are There Assets Exempted From the Means Test?
The Medicaid look-back period is the timeframe of your financial statements Medicaid uses to evaluate your financial standing. The timeframe can vary from one state to another but New York has a 60-month or 5-year look-back period on Nursing Home Medicaid.
The state will evaluate your financial statements to see that you didn’t just gift away your assets to friends and family to retain them. If you are found to have given away your assets, you may lose your eligibility and may be prevented from applying for some time.
Some assets are exempted from the look-back period. The valuations of these assets will not be included in the value that will be counted against you in the look-back period.
- Your primary residence – the residence where the Medicaid applicant lives (or has intent to return) is exempt provided that the home equity interest is less than $955,000
- A primary vehicle – as long as it is fair market value, you may keep a motor vehicle regardless of value as long as it is necessary for employment or transportation for medical treatment, and/or modified for the transportation of a handicapped person
- Personal effects and household goods – items such as clothing, jewelry, hobby items, recreational equipment, and musical instruments may be exempted. However, if they have significant value, they may be considered investments rather than heirlooms.
- A burial trust or burial allowance – burial funds of up to $1,500 are exempt from the look-back period
- 401k and IRAs in payout status
- A life insurance policy with a value of $1,500
You may be eligible for other exemptions. It is crucial to seek the help of an experienced Long Island Medicaid planning attorney to be able to explore your options and determine your eligibility for other exemptions.
What Should I Do If I Don’t Meet the Means Test Eligibility?
There are some options that you can explore if you don’t meet the eligibility criteria. However, it must be noted that careful planning is essential to make sure that you don’t violate any of the Medicaid regulations.
Spending down assets
Most people spend down their assets and use their excess resources to pay for medical bills out of pocket until they can qualify for benefits. This method can be applied through spending assets on debt, mortgages, bills, etc. as long as they do not fall outside of fair market value.
Medicaid planning involves the use of estate planning measures to allow a person to avail of government benefits without losing most of their assets. This method can be very useful to individuals who have complex assets that would not be easily addressed through other methods.
|Options for Those Who Don’t Meet Means Test Eligibility||Description|
|Spending Down Assets||Many individuals spend down their excess assets to cover medical expenses until they qualify for Medicaid. This can include paying off debt, mortgages, bills, etc., as long as they don’t exceed fair market value.|
|Medicaid Planning||Medicaid planning utilizes estate planning strategies to help individuals qualify for government benefits while preserving a significant portion of their assets, especially when dealing with complex assets.|
How Long Does It Take for Medicaid To Be Approved
The processing time for Medicaid applications is typically 45 days, while applications requiring disability determinations may take up to 90 days. Failure to provide necessary documents promptly can extend the processing time for determining eligibility. Non-cooperation with Medicaid can result in the denial of the application, necessitating a new application submission after gathering the required documents, further delaying the eligibility date.
In the event of eligibility, the Medicaid agency will notify you via letter, providing your eligibility date and the amount of payment required for your care. This payment could be in the form of spend down liability if you qualify as medically needy or a share of the cost if eligibility is based on other criteria.
Submitting a Medicaid application at the earliest opportunity can provide peace of mind, as it allows applicants to plan for their medical expenses and avoid potential financial difficulties. Moreover, an early application can help applicants identify any potential issues with their eligibility, which they can address and resolve promptly. A skilled Medicaid planning attorney can guide you through the entire application process, helping you avoid mistakes or submitting incomplete or inaccurate information that could delay your application. At Schlessel Law PLLC, our team of New York Medicaid lawyers may be able to help increase the chances of a successful Medicaid application. Call us to learn more about how we can help.
Medicaid Excess Income Program
The Medicaid Excess Income Program allows applicants to avail of Medicaid benefits while also retaining their monthly income even if they don’t necessarily meet the income requirements. If your excess income over the Medicaid level is only enough to cover your medical bills in a month, then Medicaid can provide for your medical bills beyond that excess in your income. This method can be used to pay for outpatient care, doctor and dentist visits, prescription medicine, and even long-term care.
If your income requirements go above the requirement for Medicaid, you may be able to utilize one or more of these methods to help you qualify. However, it is important to remember that the best method that you can use will depend on your financial situation.
Medicaid 5 Year Look-Back
The Medicaid 5 year look-back period is an essential feature of Medicaid’s financial evaluation procedure. In states like New York, it typically spans 60 months or 5 years. During this period, Medicaid examines your financial transactions to verify your eligibility for Nursing Home Medicaid.
The look-back period’s primary purpose is to confirm that applicants haven’t intentionally transferred or gifted their assets to retain Medicaid eligibility. If such transactions are identified, penalties may apply, including a period of ineligibility for Medicaid.
However, certain assets are exempt from the look-back period. The valuation of these exempt assets won’t negatively impact the financial assessment. These exemptions include the primary residence, where the equity interest is below $955,000, and a primary vehicle, irrespective of its market value, if it’s essential for employment, medical transportation, or modified for a handicapped person.
Additionally, personal effects and household goods such as clothing, jewelry, hobby items, and musical instruments may also be exempted. However, if these items possess significant value, they may be deemed investments rather than personal belongings.
Burial trusts or allowances up to $1,500, 401k and IRAs in payout status, and a life insurance policy with a value of $1,500 are also exempt from the look-back period.
Get the Help of an Experienced Long Island Medicaid Planning Attorney
Before you make a decision, consulting with a skilled Long Island Medicaid planning attorney can help prevent costly mistakes from happening. Your eligibility for government benefits like Medicaid may be jeopardized or you might get subjected to Medicaid’s estate recovery program.
Our top-rated Long Island Medicaid planning attorneys at Schlessel Law recommend planning for Medicaid long before you need it. We understand the financial and emotional strain long-term care planning can have on a family. Seth Schlessel, an experienced Long Island estate planning attorney, has helped families in seeking quality care for their loved ones while also maintaining their legacy. We may be able to help guide you through the often complicated process of applying for Medicaid. We provide skilled and compassionate legal counsel and representation.