The new resource allowances include applications for those over 65, blind or disabled, parents, grandparents or other caretaker relatives living with children under 21, and single individuals and childless couples between the ages of 21 and 65 who are not disabled. One of the goals of this change was to make the Medicaid rules simpler by having the same standards apply to every applicant across the board.

Some of my clients have already run into resistance from either Medicaid workers or people in hospitals or nursing homes who are assisting them with Medicaid. They've been told that the new resource allowances are only for community Medicaid applications, and that is simply not true. People have been told that the new resource allowance is not in effect yet, and again, it is effective as of April 1, 2008.

The resistance to the change is understandable because it is dramatic. The resource levels have typically increased by no more than $50 and $150 a year. A number of years ago the resource allowance was actually rolled back and again has been increasing annually at a snail's pace. For it to suddenly triple has taken people by surprise, but that it absolutely the case.

There are also considerations for those of us who do Medicaid planning. Whereas before we had to advise people who had excess resources to either spend them or transfer them, now they will be able to keep significantly higher amount in their names. People who had life insurance policies with cash values exceeding the resource allowance typically had to cash in the policy or transfer ownership. Now they may very likely be able to keep the policy in their own name. Although applicants over 70-1/2 and had IRAs or other types of retirement funds could keep those assets as long as they were in payment status, people who are younger and did not have their IRA in payment status would very often have to cash in that asset in order to make themselves eligible. Now, depending on the amount, they may not have to resort to such drastic action. Even though transfers do not have any effect with regard to community Medicaid, they do trigger a period of ineligibility of as much as five years for institutional care. Therefore, eliminating a possible transfer is always a positive for Medicaid applicants.

It is rare that we get any positive news regarding Medicaid. We have been bombarded with negative publicity, mostly coming from the federal government. One of the last acts of the Spitzer administration was to try and make the Medicaid program more accessible, and thankfully the Paterson administration has gone along with that approach. It's hoped that this is the beginning of at least a more tolerant attitude toward Medicaid recipients in New York State and, depending on the November elections, that federal policy might become more favorable as well.

Once they allow me in the office full time, I promise to keep you all posted.