Home ownership and Medicaid eligibility are often linked, as New Yorkers receiving community-based personal care services may need to “spend down” their assets. This is because, unless you plan ahead and employ specific strategies, it will be necessary to deplete non-exempt assets in order to qualify for the program that covers these costs. What assets can you keep when you go on Medicaid? Fortunately, there are ways to decrease your estate value in the face of this requirement and still qualify for Medicaid.
The most valuable asset most people own is their home, known as a homestead. The value of a homestead is not counted when determining Medicaid eligibility, so long as the applicant, spouse, or their minor, blind or disabled child resides in the home. If you own a second home, however, it will be counted as a resource, and the home’s equity must meet your state’s limit. What assets can you keep when you go on Medicaid? It’s also important to note that homesteads are not protected from Medicaid estate recovery, which could put a lien on the property after a recipient’s death.
Other assets that are considered resources for purposes of determining Medicaid eligibility include cash and assets that easily convert to cash such as savings and checking accounts, investments, and life insurance policies with a cash value of up to $1500. Non-liquid assets such as real estate and prepaid funeral plans are not counted. In addition, the equity in your primary residence (up to $1,071,000 in 2024) is exempt from consideration when determining Medicaid eligibility. What assets can you keep when you go on Medicaid? These exemptions are crucial for individuals seeking to maintain some form of financial stability while receiving Medicaid.
There is, however, a look back period that applies to individuals who receive institutional Medicaid (nursing home care). This is the period of time that precedes your date of admission into an institution and during which Medicaid checks all your previous asset transfers to ensure you did not intentionally gift or sell your assets in order to qualify for the program. What assets can you keep when you go on Medicaid? Violating this rule will result in a penalty period of ineligibility, making it essential to plan asset transfers carefully.
Another key issue with home ownership is that if you become institutionalized, you will not be able to obtain Medicaid coverage to cover the cost of your care until you prove an intent to return to your home. What assets can you keep when you go on Medicaid? This can be proven by an affidavit signed by the person and/or written statements from friends or family members with knowledge of the person’s intent.
If you are considering applying for Medicaid to pay for nursing home or home and community-based personal care services, it is crucial to consult an experienced elder law attorney who can explain how the rules regarding home ownership and Medicaid eligibility apply in your situation.
The government has increased the Savings limits for Medicaid so people can keep more of their assets and qualify for long-term care services. What assets can you keep when you go on Medicaid? The new limits are designed to help individuals retain a greater portion of their savings while still being eligible for Medicaid.
The state has also made changes to improve the Medicare Buy-In Program for Working People with Disabilities (MBI-WPD) and the Medicaid Savings Program (MSP), making it easier for beneficiaries to continue to meet their Spenddown obligations. The income eligibility limit for MSP will increase to $28,133 for an individual and $37,902 for a couple. The MSP program pays for an individual's Part B premium, as well as coverage of co-pays, coinsurance, and deductibles. This helps people who have significant expenses that they cannot afford to pay on their own and would be unable to qualify for Medicaid without a spenddown. What assets can you keep when you go on Medicaid? These programs are essential for many who would otherwise be financially overburdened.
In addition, the MSP program has changed the way it pays for the Medicare Advantage Plan benefits that an individual receives. The MSP will now pay for the Medicare Advantage plan benefits directly, rather than paying the Medicare Advantage Plan provider and then passing the money on to an individual. This change will save individuals a significant amount of time, money, and hassle. It will also save the Medicare Advantage plan providers from having to worry about whether they are properly billing Medicaid for the benefits that are owed to the beneficiary. What assets can you keep when you go on Medicaid? Direct billing simplifies the process for all involved parties.
When a person applies for Medicaid to pay for nursing home costs, the person must show that their available financial resources are no higher than the Medicaid resource limit of $31,175. Many people who need long-term care are not aware of the fact that they can protect most of their life savings by sheltering certain assets. These assets can include an irrevocable trust, a cash value life insurance policy that is owned by the applicant and not their spouse, or a home with equity of up to $1,071,000 in 2024. What assets can you keep when you go on Medicaid? Being informed about these options can make a significant difference in financial planning for long-term care.
Another popular strategy is to transfer assets into a pooled income trust. This is a special type of trust that the Medicaid agency does not consider as assets when it budgets a community Medicaid applicant's income. However, it is important to note that there are very specific rules about how and when these trusts should be set up, so it is important to consult with a qualified attorney. What assets can you keep when you go on Medicaid? Understanding the details of such strategies is crucial.
People who apply for Medicaid to pay for nursing home costs often face serious financial challenges. They are forced to sell investments, cash in life insurance policies, and/or even sell their homes in order to satisfy the Medicaid resource and income limits. These financial consequences can be avoided with the help of an experienced attorney. Whether you are planning for the future or already in need of long-term care services, we can help you find solutions that work best for your situation.
If you have a substantial amount of money saved up in retirement accounts, you may be worried about how it could impact your New York Medicaid eligibility. In general, most states count certain assets – known as resources – toward your eligibility for means-tested public benefits like nursing home care or assisted living services. But the rules are complex, and you could be forced to spend down your assets if you don’t plan properly. What assets can you keep when you go on Medicaid? In this article, we address strategies to preserve and protect your retirement account savings while remaining eligible for Medicaid benefits.
Countable Assets and Income
In most states, there are different rules for how retirement accounts (i.e., IRAs, 401(k)s, 403(b)s, Keoghs, and TSAs) are treated as assets for Medicaid purposes. The rules are especially complicated when it comes to IRAs and 401(k)s that are in payout status. This is because the monthly payments made from these accounts are considered income and therefore must be budgeted against the Medicaid applicant’s income limit when applying for benefits. What assets can you keep when you go on Medicaid? It's important to understand how these distributions impact your financial standing under Medicaid rules.
But the fact is that, in many cases, a retirement account can still be exempt from the asset limit, depending on the state, the payout status, and, if married, which spouse owns the account. For example, in some states and New York, an IRA that is in payout status will not be counted as an asset for Medicaid eligibility; however, the monthly distributions will be budgeted against the recipient’s income limit when applying for benefits. What assets can you keep when you go on Medicaid? Knowing these specific state exemptions can be crucial.
There are a number of other states that treat retirement accounts differently as well, so it is important to be aware of how your state’s regulations apply to you before you begin the process of aging in place or seeking public benefits. In addition, many of the strategies used to shelter your retirement account and become Medicaid eligible can be extremely complicated and risky, so it is highly recommended that you consult with a Certified Medicaid Planner or Elder Law Attorney before attempting any of them on your own. What assets can you keep when you go on Medicaid? Professional guidance is key in navigating these complex regulations.
The good news is that even if you are over the asset or income limit, there are ways to help you become eligible for Medicaid benefits – including the new Community Medicaid (formally called Home and Community Based Long-Term Care) program in NY. The new look back period for this type of eligibility will be 30 months, which is much shorter than the 60 month look-back period that will apply to institutional Medicaid. What assets can you keep when you go on Medicaid? This shortened period could significantly affect your planning strategies.
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