“How can I afford to live on only $934 a month while on Community (home care) Medicaid?!” This is what many people think when they find out the income limits placed on those receiving Community Medicaid. So, what do you do if you can’t afford a home health aide on your own but yet you don’t want to lose most of your income to Medicaid? You call an elder law attorney and ask whether or not joining a pooled trust to save your income could be right for you.
In the modern world, humans are living longer than ever before. Generally, this is a very good thing. It means more time spent with loved ones and enjoying all the wonderful experiences life has to offer. However, age-related deterioration is a growing concern, and people are increasingly beginning to question how their desired longevity could affect their finances and their overall ability to care for themselves. Questions abound: If you develop a health condition that requires you to have the assistance of a caretaker to go about your day, how will you afford to pay for such services? How will you be able to ensure that you can maintain your quality of life when you need to rely on public assistance services in order to pay a home health aide? All of these unknowns sound scary and can create stress in even the most optimistic of people, but they don’t need to. If you require home health aide services, you should be able to receive them without sacrificing your quality of life or your life’s savings trying to afford them. “How?” you might ask. By getting Medicaid to pay for those home health aide services and by establishing a pooled trust.
Medicaid in and of itself is a welfare program, one of several that most people pay into with every paycheck they receive. Since it is a welfare program it means that to qualify for it, you need to be considered “poor” by specific government-created standards. In order to be considered poor for Medicaid to pay for the services of a home health aide, an individual must have assets and resources below $16,800 (in 2022). Under the newly enacted Medicaid laws, there is a lookback period of 30 months beginning October 1, 2020, that now applies to community based long term care services; which includes home health care services, private duty nursing services, personal care services, qualified assisted living program services and such other services for which medical assistance is otherwise available by Medicaid law.* Depleting assets down to $16,800 to apply for Community Medicaid can still be done by transferring your assets to non-exempt recipients, thirty months before applying for Community Care benefits. You do need to be careful however, as such transfers may receive penalties depending upon when and how the transfer was made. Such transfers will also affect your eligibility for Chronic Care Medicaid if you need to enter a nursing home within five years of making such transfers.
In addition to the asset and resource limit, Medicaid has an income limit when applying for Community Medicaid; it only allows an individual to keep $934 of his income per month. Medicaid is entitled to use the rest of that individual’s income (a/k/a that individual’s excess income or “overage”) to pay the Managed Long Term Care company (or “MLTC”) that provides the home health aide services. For many seniors, this is a serious problem. It is extremely difficult, if not impossible, to meet the costs of living in New York with only $934 per month. However, there is a way to keep the benefit of your excess income while still qualifying for Community Medicaid assistance, and that is by joining a pooled trust.
In many circumstances, a pooled trust allows a person to keep the benefit of the majority of his excess income or “overage” to pay for his living expenses. Assuming the individual has successfully taken steps to get under the asset and resource limit, the individual in need of Community Medicaid would then apply to join a pooled trust if his income is above the $934 limit. These types of trusts are run by not-for-profit companies, and one of their benefits is that they allow people on Community Medicaid to keep the income they need for living expenses. The pooled trust company accepts the individual’s excess income, and then uses it (less a reasonable fee charged by the pooled trust company) to pay the individual’s monthly bills. Once the pooled trust account is established for the individual, documentation gets sent to Medicaid to let them know that the individual has joined a pooled trust. Then, Medicaid pays for the individual’s home health care and the MLTC does not ask for his excess income as contribution for its services as long as the individual continues to put his excess income into the pooled trust every month. Hence, the individual gets a home health aide without having to attempt to live on only $934 a month and sacrificing his quality of life in order to afford home care.
Sounds too good to be true? Of course it does! “Why is it allowed?” you might ask. Perhaps it is because Medicaid understands that the cost of paying for services in a nursing home vs. caring for people in their own home is a lot less costly. It is good public policy to reward people who remain at home for their long-term care needs.
Make no mistake however, that as with any sophisticated planning, there are drawbacks and potential pitfalls to be aware of that can ultimately work against you. The laws regarding Medicaid and how the counties of New York choose to implement them are ever-changing and, unfortunately, no solution is perfect. However, joining a pooled trust may be an option that helps protect you and your loved ones in the event someone needs the assistance of a home health aide. If you have any questions about the option of joining a pooled trust because you are already receiving Community Medicaid benefits or intend to apply for them, feel free to contact us at 631-686-6500
* However, at the time of this article 8/2022 – the Department of Health Services has not started to implement this 30 month look back period and does not plan to until Federal emergency regulations are lifted for COVID -19 protocols.