Medicaid and Estate Recovery in New York

[jim584672]

I have been researching Medicaid and thought I would post my findings. Note that I am in New York, and each state may have different laws.

Look like Medicaid can place on lien on property only if a person does not occupy the property. So a person in a nursing home could have a lien placed. If the person comes out of the nursing home, for example, the lien must be removed.

Medicaid will try to recover the amount it has paid out from your 'Probate' estate when you die. Probate estate being property held in your name alone, without a named beneficiary. The solution is to make sure you have no property that falls into the 'Probate' estate category. Make sure your accounts have named beneficiaries, or is held as Joint Tenants with Right of Survivorship - JTWROS. Make arrangements to have real property not fall into the 'Probate' category upon your death. Doesn't seem that hard to protect an estate in a Probate recovery state like New York.

Medicaid outlays from age 18-54 are NOT subject to estate recovery. Age 55 plus IS subject to recovery. Medicaid can only recover up to 10 years worth of benefits counting back from the date of death.

I ask that if anyone knows the law, please correct me if I have made any errors about this.

 

[youbet]

I do not believe that in Illinois you could have financial assets (checking acct, savings acct, CD's, brokerage acct, etc) of significant value and have Medicaid pay for your LTC simply by adding another person's name to the acct. Medicaid would not pay until these assets were spent down to the state's prescribed levels. Therefore, there would be no financial acct's in probate for the state to go after in a recovery process.

A primary residence is more complicated and it depends whose name is on the deed along with the Medicaid owner and when the name was added.

Before tying up real estate with dual ownership or other complications, be sure the care needing person has significant liquid assets to begin NH life as a private pay client. Here in northern Illinois, the selection of NH's that accept clients beginning their stay already on Medicaid can be very dismal. If you can at least pay the first year or so privately, you can get into the top notch facilities and be allowed to stay once you run out of money and Medicaid begins. But it's very, very hard (here at least) to get into a top notch facility when Medicaid is going to be the payer from day one.

 

[jim584672]

I do not believe that in Illinois you could have financial assets (checking acct, savings acct, CD's, brokerage acct, etc) of significant value and have Medicaid pay for your LTC simply by adding another person's name to the acct. Medicaid would not pay until these assets were spent down to the state's prescribed levels. Therefore, there would be no financial acct's in probate for the state to go after in a recovery process.

A primary residence is more complicated and it depends whose name is on the deed along with the Medicaid owner and when the name was added.

Before tying up real estate with dual ownership or other complications, be sure the care needing person has significant liquid assets to begin NH life as a private pay client. Here in northern Illinois, the selection of NH's that accept clients beginning their stay already on Medicaid can be very dismal. If you can at least pay the first year or so privately, you can get into the top notch facilities and be allowed to stay once you run out of money and Medicaid begins. But it's very, very hard (here at least) to get into a top notch facility when Medicaid is going to be the payer from day one.

We essentially have two Medicaids since the ACA. The 18-64 yo MAGI group for insurance only - no LTC, with no resource test - income test only, and the old Medicaid for elderly, disabled, blind with spend downs, resource and income tests. Each state can set their own rules, NY eliminated the resource test in 2010.

Since the estate recovery rules were not changed with the ACA it creates odd situations never intended in the original recovery law. Before no one could even get Medicaid in the first place without spending down almost everything first. By eliminating the resource test a whole new class can now get Medicaid easily, and still have substantial resources.

New York is very liberal, the Probate recovery is fairly easy to get around. Some states are very aggressive on estate recovery.

 

[youbet]

By eliminating the resource test a whole new class can now get Medicaid easily, and still have substantial resources.

Yeah...... I have mixed feelings about those situations. I know that for many members of this discussion board, an important part of their ER strategy is having a mountain of financial assets while showing little income. Therefore they collect lots of welfare-like subsidies and benefits. But I have to admit it rubs me the wrong way to think of young working families with mid-level incomes but, as of yet, little savings being taxed to pay the way for millionaires who are experts at gaming the system.

 

[jim584672]

Yeah...... I have mixed feelings about those situations. I know that for many members of this discussion board, an important part of their ER strategy is having a mountain of financial assets while showing little income. Therefore they collect lots of welfare-like subsidies and benefits. But I have to admit it rubs me the wrong way to think of young working families with mid-level incomes but, as of yet, little savings being taxed to pay the way for millionaires who are experts at gaming the system.

I don't look at it in that way. They have been extracting huge sums of taxes out of someone like me for 30 years. I look at like it is a recovery of stolen property. I am not getting out more than I already put in. I will never recover all of it, but this is a start.

 

[jim584672]

Also, they have forced the interest rates down to zero for five years, robbing the asset rich conservative investor folks of chucks of income. This is the least they can do.

 

[Act2]

Yeah...... I have mixed feelings about those situations. I know that for many members of this discussion board, an important part of their ER strategy is having a mountain of financial assets while showing little income. Therefore they collect lots of welfare-like subsidies and benefits. But I have to admit it rubs me the wrong way to think of young working families with mid-level incomes but, as of yet, little savings being taxed to pay the way for millionaires who are experts at gaming the system.

Youbet, I also see reason for this type of concern, given some of the comments on this forum (not just this thread). I am very glad that preexisting conditions no longer disqualify anyone from insurance and that lower income persons can now qualify for ACA subsidies or other health coverage. But, try as I might, I can't reconcile the goal of FI with the goal of shifting as many costs as possible to others. I'm not trying to start a spat and do not mean to be disrespectful, I'm just trying to understand how someone can consider that they are 'financially independent' when their plan is to collect benefits that are funded by the work of others, many of whom have considerably less wealth.

Like you say, the perspective of taking as many benefits as one can manipulate their income to get is clearly an important part of many posters' ER strategy, and this view appears to be encouraged and in fact institutionalized by the ACA, as even the CBO recognizes, so perhaps I am just really, really old-fashioned and in the minority in my understanding of what it means to be FI and in having any concern for the possible economic and social implications.

I'm not trying to convert anyone's thinking, just trying to understand. If this is too political, I apologize ahead of time.

 

[Hermit]

Yeah...... I have mixed feelings about those situations. I know that for many members of this discussion board, an important part of their ER strategy is having a mountain of financial assets while showing little income. Therefore they collect lots of welfare-like subsidies and benefits. But I have to admit it rubs me the wrong way to think of young working families with mid-level incomes but, as of yet, little savings being taxed to pay the way for millionaires who are experts at gaming the system.

+1
My feelings too. But, on the other hand, I'm happily collecting SS on my (deceased) wife's account. My thought is that its not gaming the system at all. That is how it is set up. No need test involved. At least that is how I justify it. I'm hoping this line of reasoning doesn't make me a hypocrite.

When it comes to long term care, I will self insure. My kids and favorite charity will have to do with less of an inheritance should I have to use it in my last years.