Medicare vs. Medicaid?
Medicare is a non-income based federal healthcare program primarily for seniors over the age of 65, people under age 65 with certain disabilities, or people of any age with end stage renal disease. Medicare recipients may be required to pay premiums, coinsurance, and deductibles. Medicare provides limited coverage for medically necessary care, acute care, and focuses on short-term services for certain conditions that are expected to improve.
Medicaid, on the other hand, is an income based joint federal/ state program that provides coverage for medically necessary care and long-term care to low income people including those 65 or older, disabled or blind. Unlike Medicare, Medicaid will provide coverage for long-term care Medicaid will continue so as long as the patient continues to meet all the eligibility requirements.
One of the greatest fears a Senior may have is that they may end up in a nursing home. This not only means a great loss of personal autonomy, but also a tremendous financial price. Most people end up paying for nursing home care out of their savings until they run out, after which, they can qualify for Medicaid to pick up the cost.
The advantages of paying using your own resources are that you are more likely to gain entrance to a better quality facility and doing so eliminates or postpones dealing with New York State’s Medicaid process, an often demeaning and time-consuming process. The disadvantage is that it is expensive.
Careful planning, whether in advance or in response to an unanticipated need for care, can help protect your estate, whether for your spouse or for your children. This can be done by purchasing long-term care insurance or by making sure you receive the benefits to which you are entitled under the Medicare (based on age) and Medicaid (based on need) programs. Veterans may also seek benefits from the Veterans Administration (based on military service).
Those who are not in immediate need of long-term care may have the luxury of distributing or protecting their assets in advance. This way, when they do need long-term care, they will quickly qualify for Medicaid benefits. Giving general rules for so-called “Medicaid planning” is difficult because every client’s case is different. Such factors as the amount of savings, income, marital status, home ownership and family support affect the planning. Still, a number of basic strategies and tools are typically used in Medicaid planning.
What is Medicaid Planning?
Medicaid benefits are partially funded by the federal government and governed in accordance with federal guidelines. Medicaid benefits are also funded by state and local governments. Most clients are primarily concerned with eligibility for Medicaid in-home benefits and institutional benefits for long-term care.
As part of the Medicaid planning and application process, the individual and/or the spouse’s assets, also called “Resources”, income, prior gifts and other transfers are reviewed with the goal of conforming them to the applicable Medicaid rules and regulations. Proper analysis is important to ensure Medicaid eligibility when the benefits are needed and that the applicant is not subject to an asset transfer penalty period, a period of ineligibility.
Q: What is Crisis Medicaid Planning?
Crisis Medicaid Planning describes a situation wherein a client needs to qualify for Medicaid at the present time, and therefore, requires strategies which will work immediately. A typical Crisis Medicaid Planning occurs when a client, who is not Medicaid eligible, has been advised by a hospital or other medical personnel that the client cannot return home, and that the client will be referred to a nursing home or rehabilitation facility. The family must now find a way pay the nursing home or rehabilitation facility.
With any nursing home Medicaid application, there is a 60-month look back period which will delay eligibility. Therefore, clients are strongly encouraged to plan for long-term care as part of their estate planning. Proper planning, if made timely, will avoid Crisis Planning and may protect a significant part of their family’s assets.
Why is Medicaid Planning necessary?
Medicaid Planning is very complicated in New York. Costs associated with Nursing Home and/or Assisted Living Facilities can exceed $10,000.00 a month. Many adults who may need these facilities simply cannot afford to purchase such long-term care policies or can better utilize the cost of the annual premiums. For that reason, one should choose an attorney that has experience and knowledge of the ever changing Medicaid Laws.
Is Medicaid Planning the same in every state?
No, there are wide variations in Medicaid programs from state to state. Although Medicaid eligibility rules must adhere to minimum standards and guidelines set by the federal government, Medicaid is separately administered by each state so Medicaid eligibility rules vary from state to state. States have considerable flexibility to determine who is eligible and what services will be covered.
How long will it take to become eligible for Medicaid?
There’s no simple answer as to how long it might take an individual to qualify for Medicaid. Generally, local Medicaid offices determine eligibility and will send a letter notifying you if your application has been accepted or denied within 45 days of the date of your application.
If you are pregnant or applying on behalf of children, the local office has 30 days from the date of your application to determine if you are eligible for Medicaid. If you are applying and have a disability which must be evaluated, it can take up to 90 days to determine if you are eligible.
However, the time for qualification is affected by your family composition, your assets, your income and expenses, prior asset transfers, and many other variables. An experienced Elder law attorney should be able to qualify you for Medicaid with the shortest possible ineligibility period (also known as the penalty period).
What is a Special Needs Planning?
Special Needs Planning is advanced planning for families of persons with a disability. It is planning for loved ones that have special needs and who rely on government benefits, such as Social Security and Medicaid. However, these limited benefits do not provide for all the needs of the disabled person especially those services that would enhance the quality of life for the disabled person.
A properly drafted Supplemental Needs Trust (SNT) can be used to pay for services to improve the quality of life for the disabled person, while maintaining the individual’s eligibility for public assistance benefits. The rules for SNTs are very complicated so consulting with an experienced attorney who understands SNTs and current benefit laws is vital.
In addition, the guardianship over a loved one with special needs is essential. With a guardianship, certain rights and privileges are removed from the incapacitated person and conferred to the Guardian. The process varies from state to state so consulting with an experienced attorney who understands your state laws is vital.
A Guardianship process can be long and costly. Some states allow Medicaid planning but most states limit the effectiveness of such planning. It is always best to prepare ahead of time and plan for the possibility of incapacity.
A well thought out and duly executed Power of Attorney, Living Will,Health Care Proxy, and MOLST can serve as Guardianship substitutes which may save the client from the costly and time-consuming guardianship proceeding.
Notwithstanding the foregoing, a Guardianship proceeding is always an available option should the need arise for Court intervention.
What are the 2023 Medicaid Resource & Income Allowances
The New York State Department of Health has issued resource and income allowances for the year 2023. All figures are effective as of January 1, 2023.
| Institutional/Nursing Home Care | |
| Applicant Resource Allowance | $30,182.00 |
| Community Spouse Resource Allowance | Maximum Community Spouse Resource Allowance – CSRA *greater of: $74,820 or ½ of the married couple’s resources, not to exceed $148,620 (excluding residence) |
| Applicant Income Allowance | $50.00 |
| Community Spouse Income Allowance | $3,715.00 |
| Community Based Care (Home Care, etc.) | |
| Resource Allowance – 1 person household | $30,182.00 |
| Resource Allowance – 2 person household | $40,821.00 |
| Income Allowance – 1 person household | $1,697.00 (plus $20 for disabled aged, or blind applicants) |
| Income Allowance – 2 person household | $2,288.00 (+$20) |