New York’s Community Medicaid program offers low and middle-income families home care without exorbitant costs. It permits families to transfer income and savings so a frail elderly parent can become eligible for Medicaid without a 5 year look back period. It’s almost like having your cake and eating it too!
Keeping an elderly parent at home can be a challenging task for an adult child. Private home care can be expensive, with costs sometimes reaching as high as $100,000 a year for continuous care. Unfortunately Medicare does not cover long-term home care and health insurance is often not enough. However New York State offers a Medicaid program that helps pay for home care for both low-income and middle-income families.
Medicaid is a joint federal, state and city health care program that provides medical assistance to individuals with low incomes and limited assets. To qualify for Medicaid home care or nursing home care, an applicant must be a legal U.S. resident and have an income, assets and savings below a qualifying level.
2016 Medicaid requirements in New York State
In 2016 New York Medicaid requirements allow a single person to retain up to $14,850 in savings and assets and have an income of no more than $825/month. A couple applying for Medicaid can retain assets/savings of $21,750 and have an income of $1,209/per month. If the applicant’s income is higher than the Medicaid requirement, the individual can still qualify if she pays the difference between the her income and the maximum Medicaid income amount. That means if a person’s retirement income is $1000/month, she can pay the difference between Medicaid’s maximum income and her monthly income, in this case $175 ($1000 – $825 = $175). Medicaid will take care of the rest.
Many middle-income families are alarmed when they realize they must exhaust their hard-earned savings to qualify for Medicaid. Fortunately, the government offers them recourse. If a person transfers his excess savings five years prior to needing home or nursing home care, those savings are exempt from this requirement. This time span is called the “five year look back period”.
The Benefits of New York’s Community Medicaid Program
Most states require this look back period to qualify for Institutional Medicaid, which covers nursing home care, and Community Medicaid, which covers home care. The one exception is New York State. New York has a 5-year look back period for Institutional Medicaid, but no look back period for Community Medicaid. A New York resident can transfer his excess income/assets and be eligible for Community Medicaid immediately.
Institutional vs Community Medicaid
There is one catch. Although there is no penalty or look back period for transferring assets for New York’s Community Medicaid program, there is a penalty should the Medicaid recipient need to enter nursing home care within the five-year period. For example, Mom is immediately eligible for Community Medicaid if she transfers her excess savings to her son when she first applies for home care. However if she enters a nursing home within that five years period, her son must repay that money before she qualifies for Institutional Medicaid. If he has already used that money, he will be indebted to the government.
The Advantages of the Pooled Trust
Then there are individuals who want to become eligible for Community Medicaid but who would be unable to cover basic expenses like rent or utilities on the maximum Medicaid required income. The government allows these people to set up a “Pooled Income Trust”. The Trust is similar to a bank account, but it is administered by a non-profit trust company. All income is placed in the pooled income trust and the trust then pays for all necessary expenses such as medicine, rent, and utilities over the Medicaid maximum income requirement. The rest of the money is left intact except for a monthly maintenance fee.
The downside to the trust is it is strictly monitored. It can only be used for necessities. It will not cover unnecessary costs such as vacations, luxuries or gifts to grandchildren. Any money left in the trust after the person dies is generally kept by the nonprofit organization running the trust or is paid back to Medicaid.
Preparing for elder care is a serious matter, and the realization of how costly this period of life can be often feels overwhelming. There are many regulations that apply to senior care and many of them vary from state to state. New Yorkers are particularly fortunate. New York State has passed some of the more generous laws covering Medicaid. Savvy families who are aware of these regulations can anticipate their needs and use such programs as Community Medicaid to make the costs less trying.
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