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By John M. Bigler This is the first in a monthly series of articles that I will be writing for the Suffolk Times regarding elder law. The field of elder law encompasses many areas. Probably the area of greatest interest and greatest confusion is Medicaid planning and the transfer of assets. However, elder law also includes the subjects of Medicare, trusts, wills, long-term insurance, powers of attorney, health care proxies and other vehicles that elder law attorneys use to assist their clients.
Many people attempt to make themselves eligible for Medicaid by transferring their assets either to another person or into a trust. Such a transfer may result in a period of ineligibility for Medicaid. When applying for Medicaid assistance an individual will be asked what transfers of assets have taken place in the last 36 months (or 60 months if the transfer is to a trust). Don't confuse this 36-month look-back period with the penalty period that Medicaid imposes of r transferring of assets. The penalty period will be based on the amount of assets transferred during the 36-month look-back period as well as the type of medical assistance being sought and to who or what the asset has been transferred. For example, a transfer of assets of the purpose of becoming eligible for home health care results in no penalty period whatsoever. Only when there is an application fro Medicaid benefits to pay for nursing home care will a penalty be based on the amount transferred out of the applicant's name (the uncompensated transfer) divided by what's called the average monthly cost of a nursing home. In Suffolk County, the 1995 average monthly cost of a nursing home is artificially set by the state at $5,564 per month. This formula will yield an answer that represents the number of months a person is ineligible for nursing home care. This is to say a transfer of $100,000 will result in a penalty of 17 months commencing with the month the transfer was made. (Of note, Suffolk is now the only county in the state that commences the penalty the month after the transfer is made and does not round off the penalty where the penalty period contains a fraction). One major change is that, under previous law, if the equation yields a number higher than 30, the maximum penalty was capped at 30 moths. Under the new law, if an application is filed with in 36 months of a transfer, a penalty can be determined that could be much higher than 36 months. Therefore, when there are large transfers of assets, it's critically important under the present law not to apply for nursing home benefits within 36 months of the transfer. It's been my experience that there has been a great deal of misconception and misinformation surrounding the Medicaid law. Many people suffering from long-term illness make decisions out of panic and fear, and these decisions turn out to be quite harmful. In the coming moths, I will attempt to details some of the particular planning tools used by elder law attorneys to assist clients in preserving assets such as the rule of halves and spousal refusal. Hopefully, this knowledge could help the reader to avoid some of the traps and pitfalls which are an intricate part of the Medicaid law. Reprinted with permission of the Suffolk Times © 1999 [ Contact Us ] [ Guestbook ] [ Email ]  The Law Offices of John M. Bigler, Attorney At Law 1421 Wantagh Avenue, Wantagh, New York 11793-2206 1-888-ELDER-LAW · 516-409-6565 · Fax: 516-409-6522 E-Mail: info@biglerlaw.com · Web Site: www.biglerlaw.com |
In this article I will briefly focus on one of the most important points of Medicaid planning, the transfer of assets. On Long Island, the average monthly cost of a nursing home is between $7,000 and $8,000 a month. Additionally, home health care has become increasingly expensive and can also quickly deplete the life savings of a middle-class family. The Medicaid program will pay for both nursing home costs and home health care, but only if an individual has limited resources and income.