This weekend the Times Herald-Record published a story written by one of our New York elder law estate planning attorneys, Bonnie Kraham, Esq. The article sheds light on the process of applying for Medicaid–the joint federal and state program that can pay for long-term care costs. It explains how there are actually two forms of Medicaid: Community Medicaid and Chronic Care Medicaid. Community Medicaid is targeted at those who require care at home. To apply for this form of care various documents must be provided such as three months of financial material, proof of income, past tax returns, and various other “common documents.” A successful applicant can then keep a set monthly income with the remainder going to contribute to the care. Also, a single applicant can usually only keep about $14,000 in assets while a couple may keep $20,000. Local residents can consider visiting a New York elder law attorney to look at the possibility of using a “pooled” trust or Supplemental Needs Trust to keep more monthly income.
The second form of Medicaid is commonly known as Nursing Home Medicaid. It requires a more extensive application process. For one thing, financial statements for the past five years must be provided–this is known as the “five year look back period.” Department of Social Services (DSS) investigators will examine financial transactions from that period to determine if any gifts were made which could have been used to pay for this care. If they are found then a penalty period may be imposed during which time the applicant will not be eligible for Medicaid. In addition, DSS investigators will examine IRS reports from the past five years, DMV reports, and financial institution documentation. This is all in an effort to ensure that the applicant is not attempting to hide any assets. Fraud charges may be brought if the DSS investigators believe that an applicant has engaged in deceptive practices.
Unlike with Community Medicaid, a single individual on Medicaid in a nursing home is essentially required to pay all of their income to the facility. If the individual has a spouse living at home then the spouse is allowed to keep about $3,000 a month in income. There are also limits on the amount of assets that the applicant is allowed to keep. However, legal strategies can be used to substantially increase the amount of assets that a family can save while still qualifying. The Medicaid Asset Protection Trust is one of the most useful ways to protect assets from Medicaid costs.
Many Medicaid applicants have problems with the process when they attempt to go it alone without the assistance of an elder law attorney. The complex documentation requirements and intensive investigation rules often result in an official hearing being called to resolve the matter. This is a stressful and time-consuming process that can be avoided by having professional help.
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