Many aging New Yorkers may not realize the financial eligibility for Institutional Medicaid is not evaluated only at the time of the application. Instead, it requires a look-back on all assets for 60 months.
Without proper planning, many people may have too many assets to qualify for these Medicaid plans. The following tips may help applicants plan effectively to receive coverage.
1. Know how to spend down cash savings
When large amounts of cash savings prevent applicants from qualifying for Medicaid, one way to decrease that amount is by spending the money. However, many people do not want to waste their hard-earned life savings. Some smart spending options are:
- Making home improvements
- Purchasing medical equipment not covered by insurance
- Paying off credit card debt
- Investing in an annuity
Spending money in any of these ways allows applicants to retain value from their purchases.
2. Transfer property to a Medicaid Asset Protection Trust (MAPT)
Irrevocable MAPT trusts allow applicants to transfer ownership of assets to the trust. Since the trust is permanent, grantors no longer have access to the property, and the state does not include these items when calculating assets. All transfers to these trusts must occur before the look-back period, so early planning is vital.
3. Understand what to do with a home
The property is exempt from asset inclusion as long as applicants’ spouses or children under 21 live in their homes or the owners intend to return after treatment. However, if applicants want to decrease assets by gifting their homes to family members or selling them, the transfer or sale must occur more than five years before the application to prevent penalties.
Institutional Medicaid is valuable for aging adults. Planning how to manage assets may make more people eligible for it.