Once again Governor Pataki, faced with a deficit budget, has chosen the Medicaid program as the source for a reduction in government expenses. The Governor has released his 2005 budget and has called for reductions similar to those that were proposed and defeated in 2004.  These proposals will adversely affect how the elderly people and younger disabled people would be treated if they made an effort to protect their assets and thus achieve Medicaid eligibility. 

There were more than a few proposals but I will discuss only those which would have had a dramatic effect on our clients.   

Extend Transfer Penalty Rules to Community Care.   First there is a new effort to extend the Medicaid transfer penalty rules to Community Care.  Currently penalties are only imposed if a person gifts assets and applies for a form of Institutional Care.  In 1993, Congress had given the states the right to apply the asset transfer penalty rules to Community Medicaid.  Up until now, New York has declined to do so.   

Reject Spousal Refusal.            In situations where a spouse is applying for Medicaid, Medicaid budgeting requires that the assets and income of both spouses be used to determine the eligibility of the applying spouse-UNLESS.  Unless the nonapplying spouse files a spousal refusal letter which means only that in the budget process, the nonapplying spouse’s assets and income are not to be counted for purposes of determining the eligibility of the applying spouse.  There is now a new 2005 effort to do away with the right of spousal refusal. 

Effort to Extend Look Back Period to 60 Months for Transfers to Individuals.              The Governor’s new budget bill seeks to extend the look-back period to 60 months for all transfers.  A look back period means that when an application for Medicaid in a nursing home is filed, the intake worker may, for purposes of determining whether an ineligibility applies, count transfers (gifts) of assets  within the preceding 36 months (and 60 months for trust transfers).  It does not mean that there is an automatic 36 month waiting period.  It means only that if a gift(s) fell within the applicable look back period, the intake worker would calculate the ineligibility period-nothing more, nothing less.   

Effort to Start Ineligibility Period to the time of the filing of the Medicaid application.            This is perhaps the most frightening of the proposals.  The hope is that people will gift assets substantially in advance of their need for care so that even if there is an ineligibility period, it will begin running virtually immediately and thus will be over long before a person needs a form of institutional care.  To begin the ineligibility period at the time of the filing of the application would mean that waiting may not serve any useful purpose unless the applicant waited out the entire look back period before applying. 

We do not know whether this is the year that the proposals will be accepted.  I will keep you posted.  Stay in touch with our site.  Developments are posted as needed.  

to top of page