Many Medicare beneficiaries who struggle to afford the cost of Medicare coverage are eligible for help through a Medicare Savings Program (MSP), which is run by the state Medicaid office. In New York, these programs pay for Medicare Part B premiums, Medicare Part A and B cost-sharing, and – in some cases – Part A premiums.

Prior to 2023, there were three MSPs in New York, but the Specified Low Income Medicare Beneficiary (SLMB) program is no longer available as of 2023. And eligibility limits have increased for the other two MSPs:

• Qualified Medicare Beneficiary (QMB): QMB is the most robust MSP, and people who were previously eligible for SLMB or QI should be eligible for New York’s QMB in 2023. The income limit is $1,697 a month if single and $2,288 a month if married. QMB pays for Part A and B cost sharing, Part B premiums, and – if a beneficiary owes them – it also pays their Part A premiums.
• Qualified Individuals (QI): The income limit is from SLMB levels up to $2,280 a month if single and $3,077 a month if married. QI pays for Part B premiums.

MSP asset limits: There are no limits for QMB and QI in New York.

Medicare covers a great number of services – including hospitalization, physician services, and prescription drugs – but Original Medicare doesn’t cover important services like vision and dental benefits, or custodial long-term care services. Some beneficiaries – those whose financial situations make them eligible for Medicaid – can receive coverage for those additional services if they’re enrolled in Medicaid for the aged, blind and disabled.

Medicaid for the aged, blind and disabled is sometimes called disabled, aged and blind (DAB) Medicaid in New York. And if the enrollee remains in their own home instead of a nursing home, their Medicaid coverage is described as “Community Medicaid.”

In New York, DAB Medicaid covers preventive, periodontal, dentures, and oral surgery services, but it doesn’t cover orthodontia.

DAB Medicaid pays for an eye exam every two years, and will cover eyeglasses for enrollees needing a minimum of .50 diopter correction.

Income eligibility: The income limit is $1,1677 a month if single and $2,268 a month if married and both spouses are applying for Medicaid.

Asset limits: The asset limit is $30,180 for single applicants and $40,820 for couples. New York has among the highest asset limits in the country for DAB Medicaid. Only California and Arizona have higher limits as of 2023 ($130,000 for a single individual in California; there will be no limit as of 2024. And Arizona has already eliminated its asset limit). In most states, this asset limit is only $2,000 for individuals and $3,000 for spouses.

Here is more information about Medicaid asset limits in New York.

In New York, applicants whose incomes are too high to qualify for Medicaid ABD can become eligible by enrolling in the Medicaid spend-down, which allows applicants’ medical expenses to be subtracted from income that is counted toward the Medicaid eligibility limit.

Some people who were already enrolled in the spend-down Medicaid program were notified that they qualify for regular Medicaid as of 2023, due to the increased income and asset limits.

When an applicant is approved for the spend-down, Medicaid calculates the portion of their monthly income above the program’s income limit – which is known as “excess income.” Enrollees activate their spend-down coverage by submitting medical bills equal to this amount. In New York, spend-down enrollees can also pay their excess income directly to Medicaid.

New York usually approves spend-down benefits in 6-month increments – with additional coverage requiring that new medical expenses or another excess income payment be submitted.

An applicant’s excess income is reduced by the cost of any health insurance and Medicare premiums.

In New York, the Medicaid spend-down covers Long Term Services and Supports.

Income eligibility: The income limit is $1,677 a month if single and $2,268 a month if married. But again, the point of the spend-down program is to ensure that people can qualify even if their income is above these limits, as long as their medical expenses, when subtracted from their income, bring their remaining income down into the eligible level.

Asset limits: The asset limit is $30,180 if single and $40,820 if married.

Extra Help with prescription drug expenses in New York

Medicare beneficiaries who are enrolled in Medicaid, an MSP, or Supplemental Security Income (SSI) also receive Extra Help – a federal program that reduces prescription expenses under Medicare Part D.

Beneficiaries who don’t receive this program automatically can apply for it themselves. The income limit is the same as the limit for the QI MSP ($2,280/month if single, or $3,077/month for a married couple in 2023), and does not have an asset limit.

Elderly Pharmaceutical Insurance Coverage (EPIC)

In New York, low and moderate-income beneficiaries can qualify for the Elderly Pharmaceutical Insurance Coverage (EPIC) program. This State Pharmaceutical Assistance Program (SPAP) Fee Plan helps enrollees with annual incomes up to $20,000 if single and $26,000 if married afford their prescription drug expenses. The Deductible Plan helps enrollees with annual incomes up to $20,001 to $75,000 if single or $26,001 to $100,000 if married.

EPIC reduces the copays for prescription drugs covered by Part D, after the enrollee has met their Part D deductible. It can also pay for some medications Part D does not cover.

Medicare beneficiaries increasingly rely on Long-Term Services and Supports (LTSS) – or long-term care – which is mostly not covered by Medicare. In fact, 20% of Medicare beneficiaries who lived at home received some assistance with LTSS in 2015. Medicaid fills this gap in Medicare coverage for long-term care, but its complex eligibility rules can make qualifying for benefits difficult. What’s more – eligibility rules vary significantly from state to state.

Medicaid nursing home coverage

Income limits: The income limit is $1,677 a month if single and $2,268 a month if married (and both spouses are applying). When only one spouse needs nursing home care, the income limit for single applicants is used – and usually only the applicant’s income is counted.

This income limit doesn’t mean nursing home enrollees can keep all of their income up to $1,677 a month (if single). Instead, nursing home enrollees must pay nearly all their income toward their care, other than a small personal needs allowance and money to pay for health insurance premiums, including Medicare Part B and Medigap. This allowance in New York is $50/month.

Assets limits: The asset limit is $30,180 if single and $40,820 if married (and both spouses are applying). However, if one spouse doesn’t need Medicaid, the other spouse can keep up to $148,620 (the percentage of assets that can be retailed varies depending on asset level).

Certain assets are never counted, including many household effects, family heirlooms, certain prepaid burial arrangements, and one car. An applicant’s first home can’t be worth more than $1,033,000.

Home and Community Based Services (HCBS) waivers

Every state’s Medicaid program covers community-based long-term care, which is provided in an enrollee’s home, adult day care center or another community setting. These are called Home and Community-Based Services (HCBS) because recipients continue living in the community.

In April 2020, New York State limited HCBS benefits for Medicaid personal care services (PCS) – which provide help with bathing, dressing, eating – effective October 1, 2020. In response to a budget shortfall driven by Medicaid spending, the state began requiring PCS to be ordered by physicians that are approved by the State Department of Health. Those services must also be approved by an independent assessor in order for enrollees to receive them.

HCBS recipients also now have to need “at least limited assistance” with more than two activities of daily living, unless they are diagnosed with Alzheimer’s disease or dementia.

Income limits: The income limit is $1,677 a month if single and $2,268 a month if married (and both spouses are applying). When only one spouse needs Medicaid, the income limit for single applicants is used – and usually only the applying spouse’s income is counted.

Assets limits: The asset limit is $30,180 if single and $40,820 if married (and both spouses are applying). However, if one spouse doesn’t need Medicaid, the other spouse can keep up to $148,620. A primary home can also be retained, as long as the home equity isn’t more than 1,033,000.

Spousal impoverishment rules in New York

Eligibility rules for Medicaid LTSS programs differ from other Medicaid benefits when only one spouse is applying. When this occurs, only the applying spouse’s income is counted. (Normally with Medicaid benefits, the income of both spouses is counted – regardless of who is applying.)

Spousal impoverishment rules allow spouses of Medicaid nursing home care and HCBS recipients to keep a Minimum Monthly Maintenance Needs Allowance (MMMNA) from their Medicaid spouse’s income, along with resource and housing allowances. These rules apply when one spouse receives Medicaid coverage for LTSS, and the other spouse doesn’t have Medicaid.

In New York in 2023, these spousal impoverishment rules allow these “community spouses” to keep:

• An MMMNA that is up to $3,715.50 per month.
• A Community Spouse Resource Allowance (CSRA) that is between $74,820 and $148,620.
• A monthly housing allowance of up to $686.63.

Medicaid home equity limit in New York

Federal law requires states to limit eligibility for nursing home Medicaid and HCBS to applicants with a home equity interest below a specific dollar amount. In 2023, New York Medicaid enrollees can retain a primary home with equity valued at up to $1,033,000.  So applicants with more than $1,033,000 in home equity do not qualify for LTSS programs. However, New York State sometimes grants hardship exemptions to this rule.

And it’s important to note that the value of the home is included in the person’s estate, and estate recovery can be used by the state to recoup some or all of the costs that Medicaid incurred to provide the person’s LTSS benefits.

Penalties for transferring assets in New York

Because long-term care is expensive, individuals can have an incentive to give away or transfer assets to make themselves eligible for Medicaid. To curb these asset transfers, federal law requires states to institute a penalty period for Medicaid nursing home applicants who give away or transfer assets for less than their value. States have the option of using a penalty period for HCBS. Medicaid will not pay for LTSS during this period.

Until recently, New York had been one of two states (the other being California) without an asset transfer penalty for HCBS. This means transferring assets meant Medicaid wouldn’t pay for nursing home care, but it would cover HCBS. However, due to a budget shortfall, the state created an asset transfer penalty for HCBS.

This HCBS asset transfer penalty was initially expected to be phased in starting in 2021, but that was postponed amid the COVID pandemic. The asset transfer penalty is now expected to take effect no earlier than March 31, 2024..

New York State uses a 60-month lookback period to calculate its asset transfer penalty for nursing home benefits, but the lookback period will be 30-months for HCBS.

Estate recovery in New York

A state’s Medicaid agency is required to recover what it paid for long-term care related costs while an enrollee was 55 or older. States can also pursue estate recovery for all other medical costs, and can collect from enrollees who did not receive long-term care.

New York has chosen to limit estate recovery to nursing home care, HCBS, and related hospital and prescription drug coverage received beginning at the age of 55. The state recovers the cost for these services from both Medicaid ABD and Medicaid expansion enrollees (the Medicaid expansion covers LTSS in New York).

When Medicaid coverage was administered by a Managed Care Organization (MCO) (i.e., a private insurer with whom the state contracts to administer Medicaid or long-term care benefits), the state will attempt to recover what it paid the MCO. That means the estate recovery amount could differ from the actual cost of Medicaid services received. As a result, the estates of enrollees who receive few long-term care benefits could end up with large bills from Medicaid.

New York will only attempt to recover from an enrollee’s probate estate (meaning assets that are subject to a will). This means the state will not attempt to recover from retirement and bank accounts with “transfer-on-death” provisions, living trusts, and other assets that pass outside probate. (The Legislature had expanded estate recovery to include property that wasn’t subject to probate in 2011, but repealed that expansion a year later.)

New York Health Insurance Information Counseling and Assistance Program (HIICAP)

You can access no-cost Medicare counseling by contacting the New York Health Insurance Information Counseling and Assistance Program (HIICAP) at 1-800-701-0501.

HIICAP can help you enroll in Medicare, compare and change Medicare Advantage and Part D plans, and answer questions about state Medigap protections. HIICAP counselors may also be able to suggest local home care or long-term care agencies. This website has more information about the services HIICAP offers.

Elder Law Attorneys

Elder law attorneys can help individuals plan for Medicaid long-term care benefits. You can use this search feature on the National Academy of Elder Law Attorneys (NAELA) website to find an elder attorney near you.

Medicaid eligibility is overseen by the Human Resources Administration (HRA) in New York City and by Local Departments of Social Services (LDSS) elsewhere in the state. You can apply for Medicaid for the aged, blind and disabled or an MSP at an HRA office (in NYC) or at your LDSS (Long Island, Westchester and Upstate).