Jul 21, 2022 UPDATE on NY Community Medicaid 30-Month Look Back
Soon, the New York Community Medicaid program will implement a new eligibility requirement that you need to know about. The new eligibility test will apply a look-back period to Medicaid applicants seeking community-based or in-home care and assistance. I say “soon” because the date it will go into effect was delayed several times and may be delayed again. The New York Community Medicaid look-back period was originally scheduled to begin in 2021, but its start-date has been postponed several times because of various pieces of COVID-19-relief legislation.
The new look-back period for Medicaid-paid community-based and in-home nursing care will now begin no sooner than January 1, 2023. (See other delays that may occur, below.)
A “look-back period” is a process in which Medicaid will look back in time to determine if you transferred any income or financial resources for less than fair value within that designated period before the date that you applied for Community Medicaid benefits coverage. NY’s new Community Medicaid look-back period will eventually be 30 months, phased in one month at a time after it begins with a 24-month look-back period.
Community Medicaid pays eligible recipients for the cost of assistance with basic activities of daily living (ADL). Help with eating, dressing, being transferred from bed into another room, bathing, and toileting are typical examples. These services help keep aging and disabled people out of more expensive institutional care facilities, and allow them to thrive better at home with limited assistance. Even assisted-living facility residents (assuming the particular facility contracts with Medicaid’s ALP program) are eligible for Community Medicaid.
The services covered by Community Medicaid include home health care services, private duty nursing services, personal care services and assisted living program services.
At Ely J. Rosenzveig & Associates, we want all our clients and all the members of our community to understand the significant changes occurring when the new 30-month look back for Community Medicaid becomes effective. This blog post explains what the look-back period is, how it affects people who didn’t plan for it, and what we can do to help you and your family preserve your Medicaid eligibility and protect your assets.
Medicaid planning is an important component of an overall estate plan for people who want to preserve their financial assets for their children, or for anyone who wants to avoid being forced to spend down their life savings to qualify for Medicaid. The central feature of Medicaid planning has long been the protection of a person’s assets by transferring or repositioning them before the person needs to seek long-term nursing home services, or other extended institutional health care.
Now, with the new Community Medicaid look-back period beginning in the near future, even people who may only seek in-home or community-based care benefits from NY Medicaid will need to take action to preserve their interests. When planned properly, elders or disabled persons of any age can remain eligible for Medicaid to pay the costs of long-term institutional nursing care and in-home and community-based care as well.
Important Note: No transactions or asset transfers that occurred before October 1, 2020 will be considered in the NY Community Medicaid look-back when it does begin.
What Is a Look-Back Period and How Does It Work?
The law governing long-term nursing home or institutional care Medicaid eligibility requires the government to look back over a period of five years to review any transactions the Medicaid applicant made in which they sold, transferred, or gifted valuable financial assets for less than full value. The purpose of the look-back period is to prevent those with ample wealth from giving their assets away just before they apply for Medicaid, so that Medicaid would pick up the cost of their long-term nursing home needs.
Medicaid is a needs-based program which requires its benefit recipients to have low or limited income and few “available” financial resources to be eligible. If a Medicaid applicant seeking coverage for the costs of long-term nursing home has available assets that exceed the Medicaid cap, then they will be deemed ineligible until they “spend down” their financial resources to a level beneath the Medicaid cap.
When a person suspects that they will have too much income or too many assets in their name to meet the Medicaid eligibility requirements, experienced trusts and estate planners can help them position their assets in such a way that Medicaid does not consider them “available” to the Medicaid applicant to be spent down until they qualify for Medicaid.
How the New York 30-Month Community Medicaid “Look-Back” Will Work
When New York’s new 30-month Community Medicaid look-back period is implemented, it will begin by looking back over the 24-month period before a person applies for Medicaid to determine if the applicant transferred, sold, or gifted assets during that period. If a Medicaid applicant did conduct a disqualifying transaction during the look back period, then Medicaid imposes a penalty period during which the applicant is not eligible for Medicaid benefits.
The length of the ineligibility penalty period is equal to the number of months the asset that was transferred impermissibly would have covered the cost Medicaid would pay for the services the applicant is seeking coverage for. For example, if someone impermissibly gave $20,000 away to their cousin one year before they applied for Medicaid, and Medicaid would have paid $4,000 per month for the community-based or in-home personal care assistance expenses, then the applicant would be barred from Medicaid coverage for a period of five months.
*At present, the New York Department of Health does not intend to apply any look-back period to people participating in the Nursing Home Transition and Diversion Waiver program, the Traumatic Brain Injury waiver program, or those receiving services from the Office of People with Developmental Disabilities.
Certain Asset Transfers Are Not Penalized by Medicaid Under the Look-Back Period
There are a limited number of significant financial transactions that are not penalized under the new NY 30-month look-back period for Community Medicaid.
Experienced elder law and trusts and estates lawyers are extremely knowledgeable about the NY Medicaid rules and regulations and about how you can legally protect your assets from Medicaid spend-down requirements and avoid unnecessary penalties.
Here are some of the transactions that are expected to be permitted, even within the applicable look-back period:
- Transfers to your spouse or to a trust with the spouse as beneficiary,
- Transfers to a supplemental needs trust by a person under age 65 (also called a special needs trusts),
- Transfers to a blind or disabled child under 21,
- A transfer of your interest in your home to a sibling who owned an interest and who has lived there,
- A transfer of your interest in your home to a child over 21 who has lived in the home with you for at least 2 years and has acted as your caregiver during that time.
There is still time before the new 30-month look-back period for NY Community Medicaid takes effect during which changes may be made to the new rules.
Plan Ahead: Consulting with an experienced elder law and trusts and estate lawyer long before you may be seeking Medicaid coverage provides you with the widest range of options and control of your future.
Already Within Medicaid Look-Back Period? Contact a Medicaid Lawyer Today.
If you are already within a look-back period for other Medicaid coverage and you have assets exceeding Medicaid eligibility limits, you may still have options to protect many of your assets and remain eligible for Medicaid. An experienced Medicaid and elder law attorney can explain your options, and help you implement an effective asset protection plan customized to your or your loved one’s needs.
See other delays that may occur
With the passage of the American Rescue Plan (ARP) of 2021, billions of federal dollars were distributed to states to supplement their ability to provide expanded Medicaid and other services to eligible recipients. One of the conditions that came with those funds prohibits any state from reducing eligibility for Medicaid program benefits until the earlier of these two dates:
- the date when the state has spent all the funds received through the ARP, or
- March 31, 2025.
While impossible to predict with certainty, many informed observers believe the NY 30-Month Community Medicaid look-back will not begin until late 2023 or early 2024.