Many Americans rely on Medicaid, as it provides an important safety net. However, the process of qualifying in New York can be incredibly complicated, especially if long-term care is required. But not everyone realizes the importance of planning ahead, as waiting too long may impact your ability to retain important assets. Read on for more information about Medicaid in New York, why you need to plan ahead, and the best way to go about preparing your assets with the help of a Medicaid planning attorney.

What Is Medicaid Planning and Why Does It Matter in New York?

Medicaid planning is the process of organizing your income and property in order to qualify for Medicaid benefits. This is incredibly important when the need for long-term care, like a home health aide or nursing home, becomes necessary.

In New York, long-term care can be incredibly expensive, often costing families thousands of dollars per month. While Medicaid is generally the only option many families in Putnam County and the greater Hudson Valley region have to cover the cost of care, eligibility can be incredibly difficult to meet, as it involves strict limitations and intense financial review.

When Should Families Start Medicaid Planning in New York?

Unfortunately, many families may learn that their loved one does not qualify for Medicaid when the need for long-term assistance becomes apparent.

The 5-Year Planning Rule: What Medicaid Reviews

  • New York Medicaid eligibility may review financial activity in the five years leading up to an application
  • Transfers they may scrutinize include:
    • Large gifts to children
    • Adding beneficiaries to deeds
    • Transferring money into trusts
    • Selling assets for less than their fair market value

Because the lookback window for Medicaid is so large, planning early is critical to avoiding:

  • Extended periods of ineligibility
  • Expensive delays
  • Forced spending-down

The Medicaid Lookback Period and Transfer Penalties

Unfortunately, this period of time is when New York families typically make the most mistakes that may ultimately lead to the denial of Medicaid benefits.

What Triggers a Penalty Period?

  • Gifting money to family members
  • Moving assets into trusts too late
  • Transferring the deed to your home
  • Forgiving loans

Why Penalties Pose a Significant Risk

  • Penalties may delay when Medicaid benefits begin
  • Families may need to cover the costs out-of-pocket for that period
  • Mistakes cannot always be undone

Am I Eligible For Medicaid in New York?

Medicaid is a program for individuals whose income and/or resources are below certain levels. As such, your eligibility will depend on:

  • Your income
  • Your household situations
  • Your countable assets
  • Your medical needs

Medicaid is not just for the elderly. Many different populations may benefit from this program, including:

  • Children
  • Pregnant women
  • Those with certain disabilities or blindness
  • Single adults
  • Families

What Does Medicaid Cover?

There is a common misconception that Medicaid is exclusively for basic healthcare. However, planning issues typically involve long-term care coverage, like:

  • Nursing home care
  • Home health aides
  • Medical appointments
  • Medication
  • Hospital stays

Your coverage and eligibility will depend on your unique medical needs and the type of program you require. For example, community Medicaid, nursing home Medicaid, and managed long-term care all have different requirements.

Understanding Countable vs. Exempt Assets in Putnam County

One of the primary reasons that New York Medicaid planning is so complex is that not all of your assets will count against you. As such, connecting with an attorney is critical to understand what non-exempt assets must be structured in a manner that qualifies you for coverage.

Examples of Assets That May Be Countable

  • Checking and savings accounts
  • Investment accounts
  • Additional real estate properties
  • Cash gifts that were not properly documented
  • Non-retirement brokerage accounts

Examples of Assets That are Commonly Exempt

  • One vehicle
  • Household items and personal belongings
  • Certain primary residences (rules vary)

Eligibility doesn’t just depend on which assets you own, but how they are titled, what is accessible, and when transfers occur.

What Happens if Only One Spouse Needs Medicaid?

Many couples in New York worry that, in order for one spouse to qualify for long-term care, the other spouse will be left without financial stability. However, it’s important to understand that Medicaid planning allows for protection for the “community spouse.”

Who Is Considered the Community Spouse?

In general, a community spouse is a husband or wife who:

  • Will remain at home, and
  • Does not require long-term care, while
  • Their spouse applies for a long-term care program through Medicaid

Common Concerns We Help Families Address

Because Medicaid planning may still evaluate combined household resources, this can create uncertainty for the community spouse. As such, we can help:

  • Ensure the spouse at home has enough assets to live off of
  • Prevent unnecessary spending-down of savings for the community spouse
  • Avoid mistakes that can trigger penalties

Restructuring Assets to Qualify for Medicaid

There are a variety of ways that you can restructure your assets in order to better your chances of receiving Medicaid coverage. However, discussing your options with an experienced attorney is critical. Unfortunately, timing is important, so taking the necessary steps at the wrong time can lead to significant delays that impact your coverage and when you can receive benefits.

Common Medicaid Planning Strategies in New York

  • Gift certain assets to family members or loved ones
  • Create irrevocable trusts
  • Transfer the title of the home to the beneficiaries with lawful planning strategies
  • Pay off debts and mortgages (spend-down planning)
  • Make repairs to your home
  • Prepay for your funeral expenses
  • Consult an attorney regarding other restructuring methods that may work for your specific situation

Medicaid Planning Mistakes to Avoid in New York

As you can imagine, due to the complexity of this process, there are a number of errors people commonly make when planning for Medicaid benefits in New York. Understanding the most frequent errors is critical to taking the necessary steps to avoid making these mistakes.

Common Mistakes Families Make

  • Transferring assets during the look-back period
  • Assuming Medicaid and Medicare have the same rules
  • Assuming you cannot qualify because you’re over the eligibility limits
  • Waiting until long-term care needs are immediate to begin planning

Contact Our Dedicated Putnam County Estate Planning Firm

If you or a loved one needs assistance creating an estate plan and wishes to speak with an experienced attorney, Law Office of Andres D. Gil, PLLC is ready to help. Our team understands how complicated these matters can be to navigate, which is why we will do everything in our power to assist you through this process so you can have the peace of mind necessary for the future. Contact us today to learn more