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Our attorneys stay on top of changes in legislation, agency regulations, case law, and industry trends—then craft timely legal alerts to keep clients up to date on legal developments important to their business.

September 17, 2020

Strict New Criteria for Community Medicaid Program Takes Effect October 1

A widely misunderstood and underused Medicaid program is undergoing a revision of eligibility criteria in October 2020.

On April 3, 2020, NYS Governor Andrew Cuomo signed the approved 2020/2021 budget for New York State, which negatively affected the Community Medicaid program. Beginning in October, there will be a new 30-month look-back period, meaning crisis planning for the program just got more expensive and materially more complicated. Most people have been entirely unaware of the program and the scope of its existing generous home-care benefits. Many New Yorkers may wish to consider entering the Community Medicaid program before October 1, 2020, or may want to engage in planning now so as to access the program more easily after the new eligibility criteria is instituted.

By way of background, there are two main Medicaid programs in New York: Community Medicaid and Chronic Care Medicaid. The eligibility rules and benefits for each program are materially different. Chronic Care Medicaid is available for people needing nursing home care. As a general rule of thumb, a qualified elder law attorney can protect substantially all of a couple’s assets with proper planning should one of them require nursing home care, and about 45 to 55 percent should a single person need nursing home care. While most people have heard of Medicaid’s “five-year look back,” they do not realize that, in New York, the look back has only applied to Chronic Care “nursing home” Medicaid.

Presently, there is no look-back period for Community Medicaid. This means people can divest themselves of their property and access the Community Medicaid program without penalty rather quickly. Since low asset levels are a condition of eligibility for both Medicaid programs, New York is trying to slow access to both programs by penalizing the rapid impoverishment of the Medicaid applicant. New York has done this in the Chronic Care program by imposing a 60-month look-back period and by imposing penalties on transfers that occurred during the look back as well as by fixing spousal resource allowances. Beginning in October, the Community Medicaid program will impose a 30-month look back period and will impose penalties on transfers. However, prior to October 1, 2020, the Community Medicaid program will not impose any look-back or penalty periods for transfers made on the eve of seeking benefits.

The NYS Department of Health presently describes Community Medicaid as follows: “[Community] Medicaid pays for a variety of medical services that can help you continue to live in your home, or for special services available to participants in waiver [programs for people with specific disabilities]. Some of the covered services include: doctor and clinic services, prescription and non-prescription drugs, home care, personal care aides, adult day care, lab tests, transportation to medical care, physical, occupational and speech therapy, mental health services, x-rays, durable medical equipment such as wheelchairs, orthotic and prosthetic appliances.”

Certain Community Medicaid programs also pay up to $40,000 for home improvements every three years and allow for children to get placed on the payroll. In New York, Community Medicaid is available to financially and medically eligible individuals who are living in their own homes. Benefits are also available to eligible individuals who are living in independent and certain assisted living facilities. Eligibility is subject to specific rules, depending on various criteria, such as age, marital status, the amount of your assets, and the amount of your income. Plainly, the Community Medicaid program in New York offers a whole host of covered services essential to allowing individuals to age in place and remain in their homes.

As mentioned above, in October the Community Medicaid program will start imposing penalties for asset transfers. For many New Yorkers who need some assistance to remain in the community, it makes sense to contact a Barclay Damon elder law attorney and consider a variety of strategies to maximize the individual’s autonomy and independence while also insulating assets should these home-care services be needed in the future. It is therefore imperative that clients who wish to use the Community Medicaid home-care program undertake planning that may include, but not be limited to, transferring assets to trusted children, spouses, or a Medicaid trust before the October 1 effective date.

The new law is closing the window on unrestricted Community Medicaid home care. At Barclay Damon, we stand ready to serve our community and assist our clients in getting through this complicated Medicaid eligibility and application process. Now more than ever, it is important to seek the advice of an experienced elder law attorney to preserve your autonomy and independence and protect your assets.

If you have any questions regarding the content of this alert, please contact Terry Emmens, partner, at temmens@barclaydamon.com; Lisa Arrington, partner, at larrington@barclaydamon.com; or another member of the firm’s Elder Law & Medicaid Planning Team.

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