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medicaid planning eligibility

Don’t Get Trapped by Asset Transfers when Submitting a Medicaid Application!

** This article has been revised from its original version which was published on April , 2021

Medicaid eligibility rules are complicated. Many people are confused by the lookback period. And often, people aren’t sure how asset transfers can make an impact when applying for Medicaid.

The Lookback Rule

New York’s law on Institutional Medicaid imposes a “look-back” period of five (5) years for Nursing Home Medicaid benefits. Medicaid reviews transfers during that period and a penalty is assessed if the transfer is for less than the full value of the asset.

Until recently, an applicant was not penalized for any gifts or transfers concerning homecare or NY Community Medicaid, even if they took place immediately before applying for benefits.

However, NY Community Medicaid has changed. The Governor redesigned the program with a 30-month or 2.5 year look-back period with penalties imposed for uncompensated asset transfers during that time. This change became effective on October 1, 2020, but was delayed due to COVID-19 and the Department of Health for two years. It begins in October 2022 with a 15-month look-back period requiring records up to 2.5 years prior to application. It will eventually increase to the full 30 months.

Penalty Transfer Rule

During the look-back period, penalties are assessed based on uncompensated asset transfers (i.e., gifts). Each NYS region derives its penalty rate based on the average cost of care (adjusted in January each year). As of January 2022, the transfer rates are as follows::

  • NYC: $ 13,415
  • Long Island: $ 14,012
  • Rochester: $13,376
  • Central: $11,328
  • Northeastern: $12,560
  • Western: 11,884
  • Northern Metropolitan: $13,399

For example, if you live on Long Island and give away $100,000, you will be ineligible for Medicaid nursing home care benefits for 7.14 months (100,000/14,012= 7.136). Basically, for every $13,500 you gift, you are ineligible for one month.

Exempt Transfers

Luckily, there are exceptions to this rule. Medicaid allows certain transfers to qualify as “exempt” with no penalty. The following transfers are considered exempt if made to:

  • A spouse
  • A blind or disabled child

When real estate is being transferred, Medicaid has expanded the list of exempt persons to include:

  • A spouse
  • A blind or disabled child
  • A caretaker child residing in the home and rendering care to the parent for a period of at least two years
  • A sibling with an equity interest in the property who has resided there for at least one year

Medicaid Planning Attorneys

Due to the complexity of the Medicaid laws and constantly changing rules, it is important to seek the assistance of competent and knowledgeable Medicaid planning attorneys. Don’t get trapped by asset transfers after submitting a Medicaid application. The proper estate plan and Medicaid strategy can protect and preserve your loved one’s hard-earned assets.

Benefit from our estate planning and Medicaid planning experience. Consult with the experienced lawyers at Russo Law Group, P.C., to discuss Medicaid and Community Medicaid benefits before applying. Simple mistakes can cost you time and money, impacting the level of care you can afford and the lifestyle of a spouse or child. The more you spend to cover long-term care, the less you will be able to leave for your family when you are gone. Contact us or take advantage of our free seminars and webinars to learn more about how Russo Law Group, P.C., may assist you with Medicaid planning.


This Post Has 2 Comments

    1. Thank you for your comment regarding Medicaid Application questions.
      We would need to have a detailed discussion about your Medicaid Application to properly advise you.
      Our law firm is available to assist you.
      Please feel free to contact our office at 516-683-1717 to schedule an appointment with one of our experienced attorneys.
      I will answer any question you may have regarding our services and legal fees.
      I look forward to hearing from you.

      Please Note: This reply is informational only and not legal advice. You should seek the services of an attorney for legal advice.

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