Medicaid spend down strategies

On Behalf of | Jun 21, 2021 | Medicaid eligibility |

Qualifying for Medicaid is often necessary for New York residents who need nursing home occupancy due to an illness or other medical condition. Medicare typically does not provide total payment for those needing the constant medical attention, and personal assets can be exposed for attachment or taken in lieu of payment for services under certain conditions. This means that those with considerable assets must make significant changes in their personal holdings beforehand, including potentially establishing trusts or transferring property well in advance. There are also a few other options that some estate planning attorneys also recommend.

Reduce assets below state limits

Eligibility for Medicaid and asset protection go hand-in-hand in New York, as qualification is means tested. While some assets are exempt from the calculation method, such as owning one primary home and one primary vehicle of moderate value, many assets such as bank accounts and additional property are not. Retirement income can even be problematic for some who do not have an additional private medical plan that covers nursing facilities. Whole life insurance policies above $1500 in value are considered an asset as well, so term life insurance policies may be best because they are also exempt.

Investment assets and personal savings

There are many people who have accumulated significant assets over their life and will need to make some type of change in ownership designation. This transition is best accomplished with the assistance of an estate planning attorney who is experienced in Medicaid and asset protection strategies such as establishment of trusts or early transfers of additional real estate holdings before needing nursing home care.

The potential for needing Medicaid coverage is actually a primary reason that all New York residents should reassess their personal estate plan annually. Serious accidents and health events are common late in life, and it is always best to be prepared in advance.