Medicaid Planning

Medicaid is a program enacted by Congress in 1965 to address the health needs of individuals who can not afford health care. Medicaid includes coverage for home care and long term institutional care. Many people attempt to transfer assets in order to become eligible for Medicaid benefits. However, the Deficit Reduction Act of 2005 which was signed by President Bush on February 8, 2006 makes it more difficult to obtain Medicaid benefits.

In order to qualify for Medicaid an individual may have non exempt assets totaling no more than $4,200.00 (2007). A married couple may have no more than $5,400.00 combined. As such , any transfer of non exempt assets for less than fair market value after February 8, 2006 will be subject to the provisions by the Deficit Reduction Act of 2005. The first question to ask is was there a transfer of an asset for less than fair market value in the last 5 years measuring from the date a person applies for institutional Medicaid benefits. If the answer is "yes" than the second question requires a person to know the market value of the asset transferred and then divide that amount by the standard nursing home monthly care in the county which the applicant resides . This calculation will yield a penalty period for which the applicant will not be eligible for institutionalized nursing home care. In most cases the penalty period will not start until the individual is in a nursing home, has assets of no more than $4,200 plus other exempt assets) and has applied for benefits.

Questions arise as to what constitutes an exempt transfer ? For example, a transfer of a homestead, a transfer to certain trusts, etc. It is important to discuss your individual situations before the need for Medicaid arises as proper planning can save your loved ones the loss of assets which you have worked so hard to acquire. This can possibly be avoided while still providing for all your future needs.

DISCLAIMER: THIS INFORMATION PROVIDED FOR INFORMATION PURPOSES ONLY. THE INFORMATION CONTAINED HEREIN IS NOT DEEMED TO BE LEGAL ADVICE. FURTHER, MEDICAID LAWS, RULES, REGULATIONS AND POLICIES ARE CONSTANTLY CHANGING AND THEREFORE, THE INFORMATION CONTAINED HEREIN MAY BE DATED AND/OR INCORRECT. THOSE INDIVIDUALS CONCERNED ABOUT THE LEGAL ISSUES ADDRESSED IN THIS ARTICLE ARE URGED TO SECURE LEGAL COUNSEL FROM A QUALIFIED ELDER LAW ATTORNEY.

As always, we offer a free consultation to discuss your needs.

RUSSO, DARNELL & LODATO, LLP.
1975 HEMPSTEAD TURNPIKE
SUITE 401
EAST MEADOW, NY. 11554
PHONE: 516-368-0378
FAX: 516-794-5447