New York Medicare assistance program options

As a Medicare beneficiary, where you live – meaning your state of residence – can have a significant impact on the care that you receive and how you pay for that care during your “golden years.”

This page explains how New York’s regulations and policies are likely to affect your bottom line.

New York’s Medicaid spend-down for Medicaid for the aged, blind and disabled and LTSS

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.

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 $875 a month if single and $1,284 a month if married.

Asset limits: The asset limit is $15,750 if single and $23,100 if married.

How does New York regulate long-term services and supports (LTSS)?

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 percent 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 $875 a month if single and $1,284 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 $875 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.

Assets limits: The asset limit is $15,750 if single and $23,100 if married (and both spouses are applying). However, if one spouse doesn’t need Medicaid, other spouse can keep up to $128,640.

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 $893,000.

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 $875 a month if single and $1,284 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 $15,750 if single and $23,100 if married (and both spouses are applying). However, if one spouse doesn’t need Medicaid, the other spouse can keep up to $128,640. A first home can’t be worth more than $893,000.

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 2020, these spousal impoverishment rules allow these “community spouses” to keep:

• An MMMNA that is $3,216 per month.
• A Community Spouse Resource Allowance (CSRA) of up to $128,640.
• A monthly housing allowance that varies from $386 in Western New York to $1,451 in New York City.

Medicaid home equity limit in New York

Federal law requires states to limit eligibility for Medicaid nursing home and HCBS to applicants with a home equity interest below a specific dollar amount. In 2020, states set this home equity level based on a federal minimum of $595,000 and maximum of $893,000. (This limit also applies to co-op apartments and condominiums.)

New York State uses the federal maximum home equity limit – meaning applicants with more than $893,000 in home equity do not qualify for LTSS programs. However, New York State sometimes grants hardship exemptions to this rule.

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 will be phased in for applications submitted after December 31, 2020, and will only apply to asset transfers made after September 30, 2020. Furthermore, these asset transfers have occur while an individual was “otherwise eligible” for Medicaid in order for them to incur a penalty. This means that an applicant wouldn’t face penalties for transferring or gifting assets if they didn’t meet long-term care “level of care” requirements or have income below the eligibility limit at that time.

New York State uses a 60-month lookback period to calculate its asset transfer penalty for nursing home benefits, but the lookback period is 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.)

Congress exempted Medicare premiums and cost sharing from Medicaid estate recovery starting with benefits paid after December 31, 2009.

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Josh Schultz has a strong background in Medicare and the Affordable Care Act. He coordinated a Medicare technical assistance contract at the Medicare Rights Center in New York City, and represented clients in extensive Medicare claims and appeals. In addition to advocacy work, Josh helped implement health insurance exchanges at the technology firm hCentive. He has also held consulting roles, including at Sachs Policy Group, where he worked with hospital, insurer and technology clients.