01 Jun Spousal Refusal in New York Medicaid
Spousal refusal is a legal Medicaid planning strategy in New York.
Spousal refusal, also known as “just say no,” is when a non-applicant, or “community” spouse of a long-term care Medicaid applicant refuses to assist with the cost of long-term care for their spouse.
Spouses are in fact legally obligated to financially support one another. However, Medicaid cannot legally deny care if a non-applicant spouse refuses to contribute towards the care of his or her spouse. In addition, the spousal refusal law says that non-applicant spouses may lawfully refuse to make their assets and income available to their Medicaid applicant spouse. Their refusal, in and of itself, cannot, by law, adversely affect the applicant’s Medicaid eligibility.
Are Some Items Exempt from Medicaid?
Yes, specific types of assets may be exempt from Medicaid eligibility criteria (they are “non-countable”). Among these assets are: the applicant’s home (up to a value of $906,000 [in 2021]), one automobile, prepaid Medicaid-compliant funeral plans, household furniture, personal effects, and jewelry.
The community spouse is entitled to keep up to $3,259.50 per month of the couple’s combined income (in 2021), and up to $130,380 (in 2021) of the couple’s assets or “resources”.
To qualify for Medicaid in New York, the Medicaid applicant can have countable assets up to $15,900 (in 2021). If the applicant for Medicaid institutional care benefits who is otherwise Medicaid eligible, gifted or transferred countable assets at any time over the course of 5 years (60 months) prior to the date of his application, these gifts/transfers will trigger a penalty period that will delay his/her Medicaid benefits.
Is Spousal Refusal a Means to Qualify for Medicaid?
Yes, in New York. If a spouse refuses to contribute his or her income or assets toward the cost of institutional care of a Medicaid applicant (the “institutionalized spouse”), the office of Medicaid must calculate the eligibility of the institutionalized spouse based just on the applicant’s income and assets. It’s as if the community spouse did not exist!
In order for spousal refusal to help one qualify for Medicaid benefits, the institutionalized spouse must sign over to the state his/her rights of spousal support. The community spouse also must formally refuse to support their institutionalize spouse in writing.
Once this occurs, Medicaid can then file a claim for reimbursement against the community spouse. You may then ask: If Medicaid can subsequently file a claim for reimbursement, what is the benefit of spousal refusal in the first place? The answer is: Medicaid can only file a claim for Medicaid’s cost of care, a rate substantially lower than the private rate. So, at the very least, the institutionalized spouse will have benefited from care provided at a much-reduced Medicaid rate.
In addition, Medicaid may well not file a claim in the first place. Only a percentage of spousal refusal cases ultimately trigger a claim.
Further, once a claim is initiated, there is often an opportunity for negotiation with Medicaid, a process that can substantially reduce the amount the community spouse will have to pay in reimbursements. And, even when these cases cannot be settled with the Office of Medicaid, and they do go to court, New York judges typically let the community spouse retain enough resources to maintain the spouse’s former standard of living. Note, though, that even if Medicaid chooses not to sue the community spouse directly for support, it can file a claim for reimbursement against the community spouse’s estate after death.
Contact an experienced elder law attorney at Ely J. Rosenzveig & Associates, P.C. to discuss in greater detail how spousal refusal works in practice, and how they may provide invaluable counsel in navigating any and all issues that may arise, including the matter of negotiating and settling Medicaid reimbursement claims on the most favorable terms.
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