Income is any form of income received, including, Social Security, Pensions, 401K distributions, IRA distributions, rental income, interest earned, and dividends.

Individual (not married)

The institutionalized individual can use his/her income to continue paying his/her monthly health insurance premium. The institutionalized individual may keep $50 per month in income ($90 per month for Aid and Attendance – if applicable). The balance of the institutionalized individual’s monthly income will be contributed toward the individual’s monthly nursing home bill.

The institutionalized individual can keep $15,750 in assets, and may purchase an irrevocable prepaid funeral plan for himself/herself, children, spouses of children, and other qualified family members, or may keep a life insurance policy with a total face value of $1,500 or less. Any assets maintained by the institutionalized individual above $15,750 are deemed “excess resources” and are subject to a Medicaid spend-down.

Married Couple

The institutionalized spouse can use his/her income to continue paying his/her monthly health insurance premium. The institutionalized spouse may keep $50 per month in income and $15,750 in assets. The institutionalized spouse may purchase an irrevocable prepaid funeral plan for himself/herself, a spouse, children, spouses of children, siblings, and spouses of siblings.

The community spouse may keep $3,216 per month in income. If the community spouse’s individual income is greater than $3,216 per month, he or she may also keep 75% of the income in excess thereof. The community spouse may retain the home free and clear of Medicaid, so long as equity is less than $893,000. The community spouse may also keep one vehicle of any value.  In addition, the community spouse may minimally keep $74,820 in assets or a maximum of $128,640 of the couple’s combined assets. Any assets maintained by the institutionalized individual spouse and community spouse above the figures herein are deemed “excess resources” and are subject to a Medicaid spend-down.

Gifting

The law provides that there is a five (5) year look-back period on every institutionalized Medicaid application and that any transfers made during the look-back period will be reviewed to see if they make a Medicaid applicant ineligible for Medicaid. If they do create a period of ineligibility, the penalty will begin in the month the applicant is otherwise eligible and has applied for Medicaid.

By careful planning, even when an individual is in a skilled nursing facility and has made transfers during the lookback period, there are ways to preserve and protect assets and qualify individuals for Medicaid.

Promissory Note and Gift

In the event advanced planning has not been done to protect assets from Medicaid, a promissory note and gift may be an option available to the Medicaid applicant as a means to preserving approximately fifty percent (50%) of the Applicant’s excess resources for his/her family and still qualifying for Medicaid.

If you have any questions about the above material or wish to speak to an attorney, please contact Pfalzgraf, Beinhauer & Menzies, LLP at (716) 204-1055. Pfalzgraf, Beinhauer & Menzies, LLP is located at 455 Cayuga Road, Suite 600, Buffalo, NY 14225.

Pursuant to U.S. Treasury Department Circular 230, unless we expressly state otherwise, any tax advice contained in this communication (including any attachments) was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding tax-related penalties or (ii) promoting, marketing or recommending to another party any matter(s) addressed herein.

Lookback, Medicaid, Nursing Homes