The New York State budget passed in April 2020 for the fiscal year 2020-2021 includes changes to the Medicaid program that may greatly impact those seeking Medicaid for long term care assistance. Particularly, many seniors and disabled individuals who require a home health aide or assisted living services will likely face greater challenges to retain such services. With these changes, it will be more important than ever to do your estate planning early, or if you missed the opportunity to plan early, then to obtain the guidance of an elder law attorney to help you navigate the process optimally.
The Medicaid program is a federal and state program that helps with medical costs, including long term care in a nursing home or in the community, for people with limited resources and income. It is administered by each state with each state having broad leeway to determine eligibility requirements.
Until now, New Yorkers were fortunate to receive the benefits of the Medicaid long term care program with more lenient eligibility requirements than their fellow citizens in other states. For example, while other states impose a five year “lookback” to review if a Medicaid applicant has transferred money out of their name to become financially eligible for Medicaid long term care whether it is in a nursing home or in the community, New York has only had a five year lookback for nursing home long term care and not for applicants seeking long term care for home care or in an assisted living environment. In illustration, that means that until now, an applicant could legally transfer their $1,000,000 house and investments of several hundred thousand dollars to a trust, and then apply for Medicaid to pay for a home health aide without a waiting period. The recent budget passed in April will change that effective beginning October 1, 2020.
Below are highlights of some of the changes the new budget’s impact will have on the Medicaid program.
New Two and a Half Year “Look-Back” for Care in the Community
Beginning October 1, 2020, there will be a two and a half year look-back for long-term care in the community, such as home health aides and assisted living care.
If an individual is seeking Medicaid coverage of long-term care services in the community, starting October 1, 2020, New York rules will require a full review of an individual’s finances, going back two and a half years. For example, if someone applies for Medicaid to cover the cost of a home health aide, or assisted living care, the application review process will include looking back 30 months to review if the applicant or his or her spouse transferred any money or property out of their name (either to a trust or gifted to another person). In addition to the new curtailment on the ability to protect one’s hard earned assets in the face of needing long term care, this new law will result in greater challenges and effort for seniors and the disabled community when applying for community care. Each applicant will be required to gather 30 months of their full financial records (such as bank statements for each account). This may prove to be very burdensome for family members and caretakers. In addition, the extensive review of additional documentation may cause approvals to take longer, while applicants are left without the care they need. Without the right support and guidance during this more complicated process, individuals may ultimately lack the care they need that is often critical to maintaining their health and well-being.
In light of the additional challenges that one may face with these changes, careful planning can still allow individuals to obtain the help they need, even with opportunities to preserve their assets. It will be more important than ever to consult with an elder law attorney to carefully navigate this process.
What is a “look-back”?
Medicaid applications are submitted to the applicant’s local Department of Social Services (DSS) along with supporting documents. The applicant must prove that his resources (the amount of money and other non-exempt assets that he has in his name) is below the Medicaid limit. If his resources are below the Medicaid limit, assuming he meets the additional criteria, he may be eligible for Medicaid benefits. When there is a lookback, the local DSS is not only reviewing whether the applicant’s resources are currently below the Medicaid limit, but they will look back to see whether the applicant has either simply spent down his money until there is little left (which is okay), or gave away his money without receiving anything of equal value in return to be below the resource limit (which is generally not okay). During the application review process, the supporting documents with the application would need to include all financial records, i.e. bank statements for every account, for the full look-back period. When reviewing the months (or years) of statements, if DSS determines there were transfers made for less than fair market value, commonly referred to as an “uncompensated transfer,” then a penalty period is imposed based on the amount of the uncompensated transfer. The applicant must then privately pay for his or her own long term care services for the length of the penalty period BEFORE Medicaid will begin to cover the services.
Until now, New York had a 60 month look-back only for nursing home care, with no look-back for community care. The new budget will impose a 30 month look-back for community care which will greatly limit the ability to do last minute planning.
Assuming you don’t have a crystal ball or other means of fortune telling, it is imperative to plan early for maximum protection of your assets because you don’t necessarily know when you may need long term care. If you missed that opportunity, and did not do advance planning, there may still be strategies to preserve assets, although you may be more limited.
Tougher Eligibility Criteria for Enrollment in Medicaid’s Consumer Directed Personal Assistance Program (CDPAP) and Personal Care Services (PCS)
Medicaid long term care assistance involves two main components. A financial eligibility component that considers resources and income, and a health, or physical, component which evaluates the need for assistance with one’s “activities of daily living,” also known as “ADLs”. With the new budget, Medicaid applicants will have to meet higher standards of physical need to be eligible for certain long-term care services in the community. Starting in October, to be eligible, an individual seeking coverage with certain programs, such as CDPAP or PCS, will need to require some assistance with not just one, but two or more activities of daily living. (Note: there is an exception to this eligibility requirement for individuals with dementia.) An individual’s need would be determined during an assessment.
Determination of Eligibility will be Administered by Independent Assessors, and Not by the Agency that is Providing Care to the Individuals
Currently, the initial assessments and periodic reassessments to determine the level of care are performed by the agencies that provide the care to the Medicaid recipients. However, the new budget directs these assessments to be done by an agency that is contracted through the Department of Health (DOH). This may adversely affect individuals that need care because agencies will be making determinations when they don’t have familiarity with the individual Medicaid recipient and are not actively involved in the individual’s care.
It is too early to know exactly how each change will ultimately effect the future of Medicaid long term care services in the community, but if you or someone you know is either receiving care or will be in need of care in the future, it is imperative to consult with an elder law attorney to determine what you can possibly do now to plan wisely.
There are many smart ways to plan and protect your life savings and hard-earned assets while still getting the long term care you may need. While planning in advance is always critical, the new New York State budget makes advance planning all the more critical at this time.
Planning is now more important than ever. We are here to help you. Contact us today for a free consultation.