Medicaid is a means tested program requiring that the applicant meet certain income and resource levels. Medicaid will look at the applicant’s resources and income, as well as any legally responsible relative’s resources and income, when considering Medicaid eligibility. Legally responsible relatives include spouses and parents or step parents of children under 21 years of age.
For an individual to be eligible for Medicaid, he cannot have more than approximately $15,150 in non-exempt assets. If he does, he will be denied Medicaid benefits. If he meets the resource allowance, then his well spouse (a/k/a “community spouse”) is entitled to a resource allowance of between approximately $74,820 and $123,600 depending upon the couple’s non-exempt resources. Any monies above the determined resource allowance will be used by Medicaid towards the Medicaid recipient’s care.
Fortunately, there are two steps that can be taken to help a Medicaid applicant whose resource levels exceed those mandated by Medicaid. First, the Medicaid applicant can legally transfer all his assets to his spouse. This is because a transfer between spouses does not invoke a Medicaid penalty. Second, the community spouse, who now holds all or the majority of the couple’s assets in her name, can evoke “spousal refusal” by signing a statement refusing to contribute her income or resources to the Medicaid applicant’s medical care. This is because New York recognizes “spousal refusals”. With a proper spousal refusal in place, the Medicaid agency is required to determine the eligibility of the Medicaid applicant based solely on his income and resources without considering the community spouse’s income or resources.
The Medicaid agency, however, is not without recourse. It has the right to commence a legal proceeding to force the community spouse to support the Medicaid recipient. It can also file a claim for reimbursement against the community spouse’s estate following her death