Why do people want to qualify for Medicaid in the first place? Because, even though this knowledge may come as a shocking surprise, neither Medicare nor any supplemental insurance coverage policies pay for long term care. Long term care includes home care services and nursing home services. When paid for privately, the cost of long term care runs to approximately $150K-$200K in New York.
But can one qualify for Medicaid without being poor? In New York, the answer is surprisingly yes. When determining one’s eligibility, for a person over 65 years of age, Medicaid evaluates both assets and income. To be eligible, you cannot have more than $15K of assets and no more than $842 a month of income. Most people who worked their entire life in the United States will have significantly more assets and a larger Social Security and pension, so they frequently assume that they will never qualify for Medicaid. Nonetheless, some assets are considered “exempt” and “excess” income can be sheltered.
Exempt assets for the purposes of Medicaid constitute your primary home (if you are receiving long term care at home), an income producing property and your qualified retirement accounts (401K and IRA). There are complications here, of course, as Medicaid may put a lien on any of your property that will go through probate after your death. Furthermore, the distributions from the retirement accounts are counted as income. But there are various methods of dealing with both of these complications.
Excess income can be sheltered by joining a “pooled income trust.” These are set up through a non-profit organizations. Every month the Pooled Income Trust will debit your bank account for the “excess” money, will keep a small administrative fee for itself, and use the remaining money to pay any bills that you submit to them that are related to the Medicaid recipient. Items such as rent, utilities, food, additional home care services, travel and entertainment can all be paid from this Pooled Income Trust.
As a result, you can see that planning for Medicaid can be complicated. Yet do not assume that just because you have some assets or a high monthly income, you will not qualify for Medicaid.
Please contact Sverdlov Law PLLC at 212-709-8112 or ksverdlov@sverdlovlaw.com if you need help evaluating your options regarding Medicaid planning for yourself or your loved ones.