Chronic Medicaid vs. Community Medicaid in New York State
Seniors who need long-term care should know that these services are not covered by Medicare, so they will need to either purchase long-term care insurance, pay out of pocket, or apply for Medicaid. In New York State, there are two different Medicaid programs: Community Medicaid, which covers care at home, such as a personal care aide, and Chronic Medicaid, which covers nursing home care. Both programs have income and resource limits for eligibility, but the rules are stricter for Chronic Medicaid, so it is essential to understand the difference.
Income and Resource Limits
In order to be eligible for both types of Medicaid in 2019, an individual must be disabled or age 65 or older, and can have no more than $15,450 in non-exempt resources ($22,800 for a married couple who are both receiving Medicaid). For Community Medicaid, a person’s home, with an equity value up to $878,000, is exempt and is not included in the resource calculation. Qualified retirement accounts are also exempt, provided the applicant is taking the required periodic distributions, which are counted as income. With Chronic Medicaid, an applicant’s home is not automatically exempt. It may be exempt if it is occupied by a spouse or a minor, disabled or caretaker child, or if the beneficiary intends to return home.
With regard to income, an individual beneficiary of Community Medicaid in 2019 can retain income of $859 per month in addition to an unearned income credit of $20. For couples who are both receiving Medicaid, the income limit is $1,267plus a $20 unearned income credit for some couples. Income in excess of the limit can be kept in a pooled trust and be used to pay for the beneficiary’s needs, such as food, clothing and housing. By contrast, nursing home residents who are Chronic Medicaid beneficiaries will have all their income paid to the nursing facility as a contribution to the cost of care, except for $50 per month, which the resident can keep. Recipients of Chronic Medicaid cannot use pooled income trusts.
The Look-Back Period
Many seniors have resources that would disqualify them from Medicaid eligibility, so they may have to spend down their assets. Some may wish to transfer assets to family members in order to protect the resources and become eligible for Medicaid sooner. For Community Medicaid, this is not a problem, because there is no look-back period; you may transfer resources right before you apply. For Chronic Medicaid, the program “looks back” for a five-year period, during which uncompensated gifts or transfers of property will result in a period of ineligibility.
Rules for the Community Spouse
The income and resource requirements are stricter for Chronic Medicaid, but there are special rules for married couples where one spouse needs nursing home care. These rules distinguish between the institutionalized spouse and the community spouse. Resources of either spouse are deemed to be available to the spouse residing in the facility to the extent they exceed the Community Spouse Resource Allowance (CSRA), which in 2019 is $74,820, or half the couple’s resources up to a maximum of $126,420. Regarding income, spouses may have their own income, and joint income is considered to be owned one-half by each spouse. The institutionalized spouse must contribute their income to the cost of care at the facility, except for $50 per month. The community spouse may retain up to $3,160.50 per month in 2019. If the community spouse has more than this amount in monthly income, Medicaid will request that 25 percent of the excess be contributed to the cost of care. If the community spouse receives less than $3,160.50 in monthly income, Medicaid will allow them to keep a portion of the institutionalized spouse’s income to bring their total income up to $3,160.50.
Talk to a Medicaid Planning Attorney
The rules to qualify for Medicaid are complex, and this article is merely an overview. If you are considering transferring assets to qualify for Medicaid, or engaging in financial planning with respect to the Medicaid rules, you should consult with a qualified Medicaid planning attorney, who can advise you of the best course of action.
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