Are you married and about to apply for Medicaid in New York? If so, it’s important to know the New York Medicaid laws that specifically pertain to married couples. For example, should you become ill and need Medicaid home benefits, a special exemption allows you to transfer money to your spouse in order to qualify. You can do so without having to pay a penalty and without a waiting period.
Understanding what applies to married couples will help you to successfully plan and apply for Medicaid, particularly if you’re in need of home and community-based benefits. Below is a brief summary of how being married can affect eligibility and receipt of benefits. Depending on your situation, you may also want to consult an elderly attorney.
Spousal Impoverishment Rules
Enacted by Congress in 1988, the Spousal Impoverishment rules were in response to a Medicaid requirement that spousal income needed to be paid to Medicaid when married to someone needing home- or community-based care. This legislation was desperately needed to alleviate financial hardships of spouses married to nursing home residents. As a key highlight, states were allowed to budget such couples.
As of 1998, if you are married to a nursing home resident on Medicaid, for example, you are allowed to keep a certain amount of “reasonable” income and Medicaid-exempt resources (like shared property). At the same time, Medicaid payments would be paid for the care of the elderly spouse needing community-based care.
Married Couples and New York Medicaid Laws
Although these laws only apply to married couples in New York state, it’s important to note that married couples are treated as one, single unit. As a result, Medicaid requires information including financial and assets for both spouses. This is true even if only one spouse is applying and seeking Medicaid benefits.
The good news is that New York’s married couples benefit under the state’s Medicaid laws. All transfers of money and assets (even the home) made between spouses are exempt. An ailing spouse, for example, who needs immediate Medicaid for home care or nursing home will benefit. By immediately transferring assets and money to the well spouse, the Medicaid applicant spouse can then become eligible to receive Medicaid benefits the next day and without penalty.
Simply put, there are no consequences (no penalties or waiting periods) for transferring all assets or money to your spouse. This means there are no penalty periods and all assets that are transferred between spouses are exempt even if such transfers occur during the look-back period.
In addition, married couples in New York also benefit from certain assets and income allowances. The spouse who is not applying for Medicaid benefits is entitled to a permitted income allowance on a monthly basis. Therefore, the community spouse (non-Medicaid spouse) can use part of the Medicaid spouse’s income up to the allowable limit considered reasonable. Assets can be kept by the community spouse up to New York’s designated law. For example, the well spouse can assume their partner’s interest in the family home.
Using Spousal Refusal for Medicaid Eligibility
New York state sets a resource limit which determines the maximum amount of assets allowable to be kept by the well spouse. However, when a Medicaid applicant transfers all assets to the community spouse in order to qualify for benefits, the amount transferred may go over the allowable limit.
In this case, the community spouse can sign a Spousal Refusal document stating that none of the assets will be made available towards the care of his/her spouse. This means that the community spouse refuses to be financially responsible towards the ill spouse’s care.
Spousal Refusal helps the well spouse avoid impoverishment by not having to pay for their ill partner’s care or divorce their partner for the same reason. The upside is the ailing spouse will still receive Medicaid benefits.
But there is a downside. A lawsuit can be filed by the Medicaid Agency against the well spouse for monies expended for the Medicaid applicant spouse’s care. Such a lawsuit would only be allowed reimbursement by the well spouse at the Medicaid rate which is cheaper than paying out of pocket.
Even with a lawsuit pending, allowing the ill spouse to receive Medicaid long-term benefits is less expensive than the private care rate. If such a lawsuit is pursued, it’s recommended that you seek out an attorney with experience handling spousal refusal litigation if you are seeking recovery.
Don’t go it alone.
The process of Medicaid eligibility can be complicated so you may want to get some help. Get the advice of an attorney who specializes in elder care to understand your options in your particular situation. Or, contact KTS Pooled Trust, to learn how we may be able to help you with strategies to deal with excess income.
