Jun 10, 2022 2022 Spousal Refusal in NY
When you or one of your family members needs long-term nursing home or other institutional care, Medicaid can be an available resource to pay those very expensive monthly costs. Working with an experienced elder law attorney can protect your family’s savings and other assets and still permit the person who needs care to qualify under Medicaid’s income and resource eligibility criteria.
Ideally, a Medicaid compliant estate plan should be established more than five years before a Medicaid application might be needed. Usually, if a Medicaid applicant transfers financial assets within five years of filing for Medicaid coverage, those asset transfers can cause them to be ineligible for Medicaid benefits for a period of time. But, New York Medicaid permits a married couple to exercise an option called “spousal refusal” which can preserve their assets and ensure Medicaid eligibility for the spouse in need of care.
What Is Spousal Refusal?
Spousal Refusal refers to an option that’s open to a married couple whose income and/or assets exceed the level required for one spouse’s nursing home expenses to be covered by Medicaid. As you’ll see in the following paragraphs, a spouse needing long-term nursing home can be denied Medicaid coverage if the couple owns too many financial assets, unless the spouse living at home (community spouse) timely declares “spousal refusal.” The spouse living at home files a declaration refusing to pay or make assets available for the other spouse’s nursing home costs.
Medicaid considers all available income and assets of both spouses when assessing whether the needy spouse is eligible for Medicaid coverage of nursing home care. If the couple jointly own too many assets to qualify for Medicaid, the spouse in need of care can transfer all their assets to the spouse remaining at home without suffering a penalty period of Medicaid ineligibility.
Since a married spouse is considered responsible for the other spouse’s needs, Medicaid will look to the community spouse’s income and assets to cover the nursing home costs. But, the community spouse can declare “spousal refusal,” meaning that they officially refuse to be financially responsible. By invoking spousal refusal, only the income and assets of the spouse who needs care is considered in the Medicaid eligibility examination. The refusing spouse can keep or distribute assets to family members, or otherwise dispose of the financial assets as they please.
NY Medicaid 2022 Income and Resource Eligibility Rules
The 2022 NY Medicaid eligibility guidelines include income and resource ceilings for married couples when one spouse applies for Medicaid to cover the expenses of long-term care in a nursing home. The cost of such care can average anywhere from $14,000 to $20,000 per month for someone who pays privately. At that rate, a lifetime’s savings can be depleted very quickly.
In 2022, when only one spouse of a married couple needs long-term nursing care in New York, the applicant spouse is eligible for Medicaid if they own no more than $16,800 in non-exempt assets. Their home is exempt up to an equity cap of $955,000 if their spouse lives there, as is a prepaid burial contract and certain retirement accounts.
The spouse living at home is allowed to retain a Community Spouse Resource allowance (CSRA) (in 2022, the Maximum federal CSRA is $137,400, and the Minimum NYS CSRA is $74,820). To prevent the community spouse from becoming destitute, Medicaid permits them to retain income called a Community Spouse Minimum Monthly Maintenance Needs Allowance (MMMNA) of $3,435(2022). If their own income is less than that amount, the community spouse is allowed to retain as much of the Medicaid applicant’s income as will bring them up to that level. The spouse in the nursing home is allowed income of only $50 per month for personal needs.
If a community spouse’s assets are in excess of the CSRA, New York allows for the execution of a spousal refusal.
Consequences of Declaring Spousal Refusal — Medicaid Recovery Options
Spousal refusal (sometimes called “Just Say No”) sounds simple enough. However, Medicaid is empowered to file a lawsuit to seek reimbursement from the community spouse who refused to contribute to their spouse’s cost of care. But, despite its ability to seek reimbursement, Medicaid does not always do so.
If Medicaid does file a lawsuit against the community spouse to recover the funds the program spent for the institutional spouse’s care, the refusing spouse can get help from an experienced elder care and Medicaid planning lawyer who can usually negotiate a settlement with Medicaid for a fraction of the government’s claim.
Alternatively, if the refusing community spouse does repay Medicaid any of the costs of their spouse’s Medicaid-paid expense, the amount to be reimbursed is only the reduced cost that Medicaid pays, substantially less (typically by a factor of 30% to 40%) than the spouse would have paid privately for the same care had they not exercised the spousal refusal option.
How Ely J. Rosenzveig & Associates Can Help
For many years, the experienced elder law and Medicaid planning lawyers at Ely J. Rosenzveig & Associates have been representing married couples and individuals who need to protect hard-earned assets for their family while also meeting Medicaid eligibility requirements.
This work is best accomplished in the years before the need for Medicaid coverage is required. But, if a family’s assets are unprotected as elderly members age, or if they must deal with unexpected illness or disability, it is not too late to implement asset protection strategies. The experience, creativity, and skill of the lawyers at Ely J. Rosenzveig & Associates can prove invaluable.
The elder law and trusts and estates attorneys at Ely J. Rosenzveig & Associates are members of the National Academy of Elder Law Attorneys (NAELA), the New York Bar Association’s Elder Law Section, and diligently keep abreast of the most recent developments affecting their clients’ opportunities to benefit from changes in the law.