Nursing home care services in New York are expensive. Senior citizens who do not have sufficient assets or long-term care insurance often need to apply for Medicaid to pay for their nursing home stay.
Many people transfer assets to family members and loved ones to meet the program’s financial eligibility criteria. However, some of these transactions can result in penalties if they occur within the New York Medicaid nursing home lookback period.
At Sheryll Law, P.C., we help families in Riverhead and the East End of Long Island protect their legacies and pass down their assets while maintaining eligibility for nursing home care. Below, we cover several important points about the Medicaid lookback period.
Nursing Home Medicaid in New York: Income and Asset Limits
Medicaid only pays for nursing home expenses if the applicant meets specific financial requirements. Seniors whose income or assets are over the limit must pay for their nursing home stay until they exhaust their personal resources and meet the Medicaid requirements.
As of 2023, the income and asset limits for nursing homes or Institutional Medicaid are:
- Monthly income: $1,677
- Assets: $30,182
When a single applicant is married, these numbers may vary. It is important to discuss a strategy with an elder law attorney to properly apply for Medicaid and plan for the applicants spouse.
Married Applicants (Both Spouses Applying)
- Monthly income: $2,268
- Assets: $40,821
The New York Medicaid Lookback Rule
People who do not qualify for Medicaid often transfer some of their assets to family or friends to bring their personal assets within the required limits.
This strategy can sometimes backfire. Under the Medicaid nursing home lookback rule, the Department of Social Services may penalize applicants if it discovers they have transferred assets for less than fair market value within the last 60 months, which is five years.
Note that the lookback rule extends to gifts of up to $17,000 per recipient (as of 2023), which are generally allowed under the U.S. Federal Gift Tax Rule and do not require filing a gift tax return. While gifts may avoid gift tax, they may not avoid penalties associated with the lookback period.
Consequences of Violating the Medicaid Lookback Rule
Gifts and asset transfers for less than fair market value within the New York Medicaid nursing home lookback period are potential grounds for a Penalty Period, during which the applicant will be ineligible for Medicaid.
The Medicaid Penalty Period, also known as a Divestment Penalty Period, typically begins on the date the person applied for Medicaid.
The penalty’s length depends on the value of the violating gifts or transactions and the average cost of private nursing home care in New York state. The penalty is equivalent to the time the applicant would have been able to pay for nursing care had they not gifted or transferred the assets.
Once the Penalty Period ends, the applicant may reapply for nursing home Medicaid.
If you or a loved one beleive that you may be penalized for gifts made, it is important to speak to an elder care lawyer to discuss a strategy to minimize your potential penalties.
Exceptions to the New York Medicaid Lookback Rule
Home transfers during the lookback period would not affect the applicant’s Medicaid eligibility if the recipient was:
- Their spouse
- A child under the age of 21
- Siblings who have equity in the property and have lived in it for at least a year
- An adult child who has lived in the home for at least two years and provided care for the applicant
Does the Lookback Rule Apply to Other Medicaid Programs?
As of 2023, the lookback period only applies to Chronic Medicaid, also known as Nursing Home Medicaid. The rule does not affect eligibility for:
- Medicaid Waivers / Home and Community-Based Services (HCBS): In-home health care assistance, adult day care, and assisted living services, also known as Community Medicaid.
- Regular Medicaid / Disabled, Aged 65+, or Blind (DAB): Various long-term care services, including personal care assistance and adult day care.
Medicaid law firms are preparing for a significant change in Community Medicaid. New York state plans to impose a 30-month lookback period on people applying for Medicaid home care, personal care assistance, adult day care, and assisted living services. The earliest proposed implementation date is March 31, 2024.
Plan Long-Term Care with an Experienced New York Medicaid Attorney
Due to the New York Medicaid nursing home lookback period, long-term care planning should start at least five years before applying for Medicaid.
At Sheryll Law, P.C., our streamlined process makes it easy for seniors in Riverhead and the East End of Long Island to plan for their golden years, protect their legacies, and make arrangements for long-term care.
Protect your legacy with Sheryll Law.
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