New York’s Medicaid Look-Back Period
Most people in Westchester County and Putnam County tend to think that they will not qualify for Medicaid because they have too many assets; Medicaid is usually seen as a program for lower-income households. In reality, when a person comes to a point where they need long-term care, they will almost certainly have to apply for Medicaid because Medicare only covers a very brief period of the care they will need. However, applying for Medicaid can be difficult, as there are strict requirements one must meet. The program has what is known as a “look-back” period in order to ensure that applicants do qualify.
Prevents Asset Dumping
In order to qualify for Medicaid long-term care, there are three criteria that a single person must meet: (1) having income less than $1,677 per month; (2) have assets totaling less than $30,180; and (3) need the level of medical care provided at a nursing home. If a senior has assets that total more than the required amount, they must either have a way to insulate them from Medicaid (for example, placing assets in a trust, which removes them from the estate) or must give them away.
In order to prevent Medicaid applicants from simply dumping assets that they could use to pay for their care, Medicaid has instituted what is known as a look-back period. The look-back period in New York is 60 months, during which a person may not – with rare exceptions – make uncompensated asset transfers, or they will incur a penalty. During a penalty period, Medicaid will not pay for care. The rationale is that if you transfer an asset instead of using it to pay for care, you should not be entitled to covered care because you could sell the asset instead.
How To Avoid Penalties?
There are exceptions to the prohibition on transfers, but only for immediate family members. For example, a concept called “spousal refusal” can be a way to shelter some assets. If only one spouse is seeking Medicaid care, they can transfer assets to the other spouse, who can then sign a “spousal refusal” stating that they will not allow those assets to be used to pay for care. This can sometimes result in Medicaid suing to compel those assets to be used, but such action is not a certainty.
That said, the best overall way to avoid penalty periods caused by the look-back period is to have an estate plan in place before you need care. If you have time to consult an estate planning attorney, you can wind up ahead of the proverbial game. After all, if one has already transferred relevant assets before applying for Medicaid, the look-back period is not an issue..
Contact A Mahopac or Pleasantville Estate Planning Attorney
There are a lot of misconceptions and misunderstandings around estate planning and Medicaid law. If you have questions about applying for Medicaid, contacting a Westchester County or Putnam County estate planning attorney from Meyer & Spencer, PC can be the first step toward getting them answered. We are happy to try and assist you with your case. Contact our office today at (845) 628-0009 to schedule a consultation.
