With the cost of private health care service skyrocketing, individuals are on the lookout for better and cost-effective alternatives. While Medicaid ticks all the boxes, it is not for everyone. Only eligible individuals are allowed to enjoy the benefits this government-funded health care program has to offer. With that said, who is eligible?
In a nutshell, pregnant mothers, some categories of kids, disabled adults, and individuals with low-income, among others, are eligible for this program. Generally, if your income and assets are above a certain threshold, you will be deemed ineligible for Medicaid.
Qualifying for Medicaid
If your assets is above the threshold, you don’t have to spend it down to be eligible for this program. One of the best ways to reduce your assets without spending it down and still be eligible for Medicaid is by setting up a Medicaid asset protection trust and placing your assets in it. However, to avoid penalties, you are advised to only do this five years before applying for Medicaid. For instance, if you are 61 and you place your assets in a MAPT, to avoid penalties, you are advised to apply for Medicaid five years later (when you are 66).
What is Medicaid?
Simply put, Medicaid is a health insurance program designed for individuals with low income. Most individuals pay very little, and some don’t pay a dime for Medicaid and this is because it is jointly funded by the state and federal government. Individuals who may qualify for Medicaid are:
- Pregnant women
- Individuals with disabilities
Look Back Period, how does it work?
For a senior to be eligible for nursing home care, assisted living, adult foster care, or in-home care from Medicaid, they must have a certain amount of assets and income. To stop applicants from gifting their money or assets to qualify for this health care program, the federal government implemented the “look-back period”.
The look-back period is a set designated period of time before the individual’s application during which the Medicaid administering agency scrutinizes all the financial records initiated by the senior. If the transaction is deemed to be in violation of the look-back period’s rules, the applicant will be slapped with a penalty. Penalty comes in the form of a period of time the applicant is barred from Medicaid. This means they will be unable to receive care services paid for by Medicaid for a specific number of months, or, sometimes years.
Medicaid Look-back Penalty Period in NYC.
If a New York residence requires nursing home services and applies to Medicaid to pay for them, Medicaid usually look back 5 years to see if he or his spouse made any gifts or uncompensated transfers of assets.
If the person or their spouse made any gifts within 5 years of the date of the Medicaid nursing home application, NY State imposes a penalty period which is usually calculated by adding up all the gifts made within the 60 months before the application and dividing it by the average monthly cost of a nursing home which, In New York city, is $12,927.
So for instance, if you made a gift of $130,000, you will be ineligible for Medicaid for around 10 months ($130,000 divided by $12,927).
Do you need an Elder law attorney?
If you need an elder law attorney for matters regarding your elderly loved one, don’t hesitate to call our office. Or if you are a senior and you need help with applying for Medicaid, you can also contact us for assistance. In addition, in the event that your assets and income are above the threshold, signaling your ineligibility for Medicaid, you can contact us if you wish to set up a Medicaid Asset protection Trust. However, you must have the Medicaid look back period in mind. This means that, after placing your assets in this trust, you are to wait for the next 5 years before applying for Medicaid to avoid any form of sanction.