Who Should Apply For Medicaid?
What is Medicaid?
Medicaid is a program provided by the government to settle the long term care and medical costs of low income and disabled adults, who normally can’t afford such care. Eligible individuals must have their resources below a certain limit before they can be eligible.
With this definition, it becomes obvious that high income and high net worth individuals wouldn’t be eligible for Medicaid because they are deemed capable of footing the high costs of assisted living and long term care.
Category of persons eligible to apply for Medicaid in NYC
- Adults earning below $884 monthly and having an estate worth less than $15,900
- Pregnant women
- Single individuals
- Children below 18
- Someone having blindness or other disability
- Parents and caretakers
- New York residents
- Legal aliens.
- An individual wills huge medical bills
In the case of a married couple with both spouses applying for Medicaid, their collective income and asset limits are $1,300 per month and $23,400 respectively.
That being said, there are typically three types of Medicaid in New York.
The three types of Medicaid in NYC
- Institutional/Nursing home Medicaid – The benefits here are an entitlement to eligible individuals, and the benefits are provided only in a nursing home.
- Medicaid Waivers / Home and Community Based Services (HCBS) – This is not an entitlement. The number of eligible applicants is limited and care can be provided in a nursing facility, at home, or adult day care.
- Regular Medicaid for the Aged, Blind, and Disabled – The benefits are an entitlement to all eligible applicants and can be provided at home or adult day care. If the applicant is married but applying alone, their income limit is $1,300 while asset limit is $23,400.
Knowing what Medicaid counts as income
To determine Medicaid eligibility, all funds and valuables that a person receives from any source is counted as their income. It could be salary earnings or wages, pension, social security disability income, payment from annuities, alimony, social security income, gifts, and retirement funds. Note than Covid-19 stimulus funds do not count as income for purpose of Medicaid eligibility.
When one spouse is applying for Medicaid, the other partner’s income would not be counted – unless it is the Regular Medicaid for the blind, aged, and disabled.
If a spouse is applying for the Institutional Medicaid or Medicaid Waivers, this spouse can transfer up to $3,259.50 of their income to the healthy spouse (also called a community spouse). This is done to bring the applicant’s asset or income below the limit so that they will qualify for Medicaid. However, if the healthy spouse already has monthly income, the applicant spouse can only transfer an amount that brings the healthy spouse’s income to $3,259.50 monthly.
This action of transferring (gifting) between spouses is known as Monthly Maintenance Needs Allowance (MMNA). The action helps to prevent the healthy spouse from suffering in penury.
Does this mean that if you have income or assets above $23,400, you would have to watch it get exhausted settling your long term care costs? Not so!
Through proper planning, you can make yourself eligible for Medicaid even though you have a substantial net worth.
How do you do it? By creating a Medicaid asset protection trust!
What is a Medicaid asset protection trust?
A Medicaid asset protection trust is a type of irrevocable trust that protects your assets while keeping you eligible for Medicaid. It’s a great strategy adopted by elder law attorneys in New York to protect your assets from being eaten up by your long term care costs.
Notably, whatever asset you fund into a revocable trust takes the name of the trust as its owner. By so doing, such assets leave your estate. They can no longer be counted against you for purposes of Medicaid eligibility.
However, you have to retitle the assets into the trust at least 5 years prior to your Medicaid application. That is because there is a 5 year look back period when you apply and if you have made any transfers into the trust (which is seen as gifting out) during that period, you may be disqualified for some time.
Speak with an elder law attorney
There are several rules affecting who can apply for Medicaid in New York City. Even when you think you are ineligible, you may be wrong. To ensure you get it right, speak with an elder law attorney near you today. Our NYC elder law attorneys are ready to give you all the help you need.