It is not easy for many local residents to understand all of the ins and out of the Medicaid program. While Medicaid is a critical tool that provides support for local seniors who need long-term care, it can be a whirlwind of stress, anxiety, and frustration when families attempt to navigate the administrative waters and understand what they need to do to join. Making matters worse is that fact that Medicaid qualification is based on income, and so most families are forced to “spend down” assets before receiving aid. Without proper planning, this means that many families are forced to shed most of their assets just to receive the extra care they need–loosing property and savings built up over a lifetime.
This situation seems particularly damaging for certain families, including those with one healthy spouse and the other in need of care. Fortunately, in those situations the option of “spousal refusal” exists. This essentially allows a healthy spouse to divest property from the other, such that the sick spouse qualifies for care without the healthier spouse losing most everything as well.
Eliminating the Refusal?
Recently, in a cost-cutting effort, the Governor proposed eliminating this spousal refusal option. This would force more families to spend down the bulk of their assets before qualifying for coverage. The New York Health Department claims that this might save the state about $100 million annually.
While savings public funds is an obvious need in these tight budget times, a recent SI Live editorial argued that doing so in this manner–by eliminating a critical tool for local families–may do more harm than good.
The editorial noted how spousal refusal is not some loophole that only the super-wealthy take advantage of to shelter assets. Instead, it is a critical component of the New York Medicaid system that provides reasonable protections to married couples. One Republican who is against any changes noted that the current rules allow a healthy spouse to keep a home, car, and over $113,000 in assets. Were the rules to change, those couples would only be allowed to have slightly over $20,000. In short, middle class families would be seriously affected.
The consequences may actually cause far more harm than good, because in some cases it may throw families in dire financial straits, and it may even make it financially advantageous for a couple to divorce. It seems perverse that the state would enact any program alterations that would incentivize the dissolution of even the longest-standing marriages.
Fortunately, many lawmakers have already stood in opposition to the Governor’s proposal, and it is unclear if there is anywhere near the necessary support in the capitol for any such change.