Pending changes to New York’s Medicaid eligibility rules will have serious implications for New Yorkers planning for long-term care. The New York State budget enacted in April 2020 introduced pivotal modifications to the state’s Medicaid program, which have been delayed several times as a result of the COVID-19 pandemic. While current law states that the change may go into effect at anytime after March 31, 2024, the change is not expected to be implemented until early 2025. This article will explain how these changes to Community Medicaid might impact New Yorkers’ ability to finance long term care and why early planning is essential.
What’s Changing in Community Medicaid?
What Is the New 30-Month Look Back?
For the first time, New York residents applying for Community Medicaid for home care or assisted living will be required to disclose complete financial records for themselves and their spouses for the 30 months preceding their application. This “look back” period is designed to identify any uncompensated transfers—gifts or movements of assets—that could affect eligibility.
How Will This Impact Long Term Care Planning?
This new measure significantly alters the landscape of long term care planning. Previously, applicants for Community Medicaid did not face this scrutiny of their financial history. The New York Medicaid changes will impact residents receiving the following long term care services:
- Adult day health care
- Assisted living program (ALP)
- Certified home health agency (CHHA) services
- Personal care services
- Consumer directed personal assistance program
- Limited licensed home care services
- Private duty nursing services
- Managed long-term care in the community – those enrolled in managed long-term care (MLTC) plans while residing in a community-based setting
The introduction of a look back period for these community-based long term care services and potential penalties for uncompensated transfers means that proactive financial and long term care planning are even more critical. For unprepared New Yorkers, these changes could lead to spending significantly more of their own resources before qualifying for Medicaid.
Are There Other Key Changes to New York’s Community Medicaid?
In addition to the look back period, New York is introducing new qualifications for Medicaid personal care services, making access to these benefits more stringent. The exact details of these requirements are still under review, but they promise to make navigating Medicaid’s waters even more challenging.
What Is Long Term Planning?
Long term care, or Medicaid planning, is a crucial aspect of managing your estate in New York and financial preparedness to ensure that if you are unable to independently manage your affairs and need assistance for daily living tasks, you have a plan to pay for care and protect yourself and your estate. The goal of this article is to provide a clear understanding of long term costs and the options available to pay for care so that New York City residents ensure their legacy is protected.
Long term care planning involves preparing legal documents and making decisions in advance should you become unable to manage your affairs due to illness, injury, or other reasons. This process ensures that your financial, health and personal preferences are respected and handled according to your wishes. Learn more in our video, Talking to Your Loved Ones about Estate Planning and Financial Security.
The Importance of Early Planning
The best time to plan is now. Waiting until you or a loved one is already receiving long term care services or they require such services leaves seniors and their families with limited options and could lead to severe financial strain or impoverishment. Early planning also ensures that you have the most options for protecting assets and providing for your care. This is especially true in light of the pending changes to the current eligibility rules.
Understanding Long Term Care Costs
Costs associated with assisted living, nursing facilities, and even home healthcare can be daunting. The average cost of nursing home care in New York City and surrounding areas exceeds $14,000 per month. Most people who need long term care start by paying for their care out-of-pocket by using their savings or accessing equity from large assets like real estate. Yet personal savings can quickly be depleted.
What Are the Long Term Care Private Pay Options?
Private pay remains a choice for those who either don’t qualify for Medicaid or prefer not to use it. This method involves tapping into personal assets or savings to pay for nursing home care. It provides more flexibility in terms of choosing the facility or level of care. However, it can quickly deplete one’s assets, leaving nothing for your family.
Does Medicare Pay for Long Term Care Costs?
Medicare is a federal program and primarily focuses on medical care, not long term care. Despite the misconception of many New Yorkers, Medicare will not pay for long term care. It will pay for a limited amount of time for skilled nursing care following a hospital stay or a major health event like a surgery, but Medicare will pay not for extended facility stays or ongoing home care support. Seniors also still need Medicare coverage for hospital care, doctor services and medical supplies while living in the nursing home. Understanding the specifics of what Medicare covers can help families plan better.
- What kind of facility care does Medicare cover? Medicare primarily covers skilled care, which is care that can only be delivered by trained professionals. It doesn’t typically cover custodial care, which is personal care, like bathing or dressing.
- How long of a period of skilled nursing care will Medicare cover? Medicare will cover the first 20 days of skilled nursing care at 100%. Beyond that, up to 100 days, a co-payment is required. After 100 days, Medicare will no longer pay for skilled nursing care.
Using Medicaid to Pay for Long Term Care
Medicaid is a popular option for many seniors needing nursing home care. It caters to those with limited income and assets. It is the primary payer for long-term care coverage nationwide. However, Medicaid has strict asset and income limitations, and most seniors won’t qualify for Medicaid benefits without advance planning. It is essential to work closely with a skilled New York City estate planning lawyer to prepare a careful plan to maximize both the quality of care and protection of assets.
Long-Term Care Insurance: Is It Worth It?
Long-term care insurance is designed to cover long-term care costs that Medicare and private health insurance don’t cover. This might include nursing home care, assisted living, or home care. However, the coverage depends on the policy details, and premiums can be high. In addition, the older one is, the harder it is to be considered insurable.
If long term care insurance is an option, be sure to start planning early. Insurance companies are known to reject more applicants the older they get. Reviewing insurance plans each year to ensure that the policy still meets anticipated needs is essential. Make changes if necessary, and never stop paying the premiums so that the insurance does not lapse.
Medicaid Asset Protection Trusts (MAPTs) Are a Solution for Protecting Assets
Medicaid Asset Protection Trusts (MAPTs) are a valuable strategy for individuals looking to qualify for Medicaid without sacrificing their assets. A MAPT is an irrevocable trust established during your lifetime that transfers ownership of assets to a trust, so Medicaid excludes them from the resource limit during eligibility qualification. Once transferred, you no longer own the assets directly, which helps you to meet Medicaid’s eligibility criteria. Appoint a trustee other than yourself to manage the trust and to transfer the assets, such as real estate or stocks, into the trust’s name correctly.
- Start Early: Don’t wait until it’s too late to start planning.
- Consider a Trust: A Medicaid Asset Protection Trust is one strategy to protect your assets from draining your savings to long term care costs.
- Stay Informed: As the New York Department of Health continues to provide guidance on Medicaid changes, staying informed is crucial.
- Legal Advice: Book a call with our estate planning team to discuss how to ensure that your plan meets your needs and complies with legal requirements.
Long term care planning in New York City is a necessity, especially in light of the changes to New York’s Medicaid program. By understanding these changes, taking proactive steps, and seeking the professional guidance of an estate planning lawyer, New Yorkers can navigate these complexities and ensure their long-term care needs are met without unnecessary financial hardship.
