Medicaid Planning: What Can the Healthy Spouse Keep? www.myestateplan.com 1

“Medicaid is important for a significant percentage of senior citizens because medicare will not pay for long-term care.”

NEW YORK MEDICAID

PLANNING: WHAT CAN THE HEALTHY SPOUSE KEEP?

MARK S. EGHRARI NEW YORK ESTATE PLANNING ATTORNEY

Medicaid Planning: What Can the Healthy Spouse Keep? www.myestateplan.com 2

Medicaid is a need-based government health insurance program. If you have

never been financially needy throughout your life, you may feel as though

Medicaid will never be relevant to you.

MEDICARE

Most senior citizens will in fact be qualified for Medicare coverage. Medicare is

also a government health insurance program, but it is not based on financial

need.

You become eligible for Medicare through the accrual of retirement credits.

When you are working, you can accumulate as many as four retirement credits

per year. If you have at least 40 retirement credits, you will be eligible for

Medicare coverage when you reach the age of 65.

Medicaid Planning: What Can the Healthy Spouse Keep? www.myestateplan.com 3

Why would Medicaid be relevant to people who are going to qualify for Medicare?

This is a profound question.

Medicaid is important for many seniors because Medicare will not pay for long-

term custodial care. This is the type of care that you would receive in a nursing

home or assisted living community.

Long-term care is very expensive. We practice law in the state of New York. In

our state, the average annual cost for a private room in a nursing home exceeds

$100,000.

If you can qualify, Medicaid will pay for long-term care. This is why a significant

percentage of elders seek Medicaid coverage late in their lives.

THE HEALTHY OR COMMUNITY SPOUSE There are asset

and income limits

that you must stay

within if you want

to qualify for

Medicaid. For an

individual, the

asset limit is

$2000 in most

states, but there

are some things that you own that do not count.

Medicaid Planning: What Can the Healthy Spouse Keep? www.myestateplan.com 4

Non-countable assets would include your home up to $814,000 in equity, your

wedding and engagement rings and heirloom jewelry, your household goods, one

vehicle, and your personal effects.

If you are applying for Medicaid to

pay for long-term care while your

spouse is still capable of independent

living, your spouse is referred to as

the community spouse. Under

Medicaid regulations, the community

spouse has certain rights.

The healthy spouse can keep half of

the countable community resources

up to a certain limit. This is called the

Community Spouse Resource

Allowance. In the state of New York,

the maximum Community Spouse

Resource Allowance is $117,240 in 2014. The minimum is $74,820.

To explain the maximum allowance, the community spouse can keep no more

than $117,240, even if half of the shared assets would exceed this figure.

Let's explain the minimum allowance through a hypothetical example. If the

shared assets totaled $100,000, half of that would be $50,000. However, because

of the minimum allowance, the healthy spouse could keep $74,820 if the shared

Medicaid Planning: What Can the Healthy Spouse Keep? www.myestateplan.com 5

assets totaled $100,000 in value.

Medicaid requires the institutionalized spouse to contribute most of his or her

income toward the long-term care costs. However, this requirement would be

waived if the community spouse is depending on all or some of this income.

If financial need exists, the healthy spouse is entitled to a Monthly Maintenance

Needs Allowance. This allows the community spouse to continue to receive

income that is generated by the institutionalized spouse, even if it would have

otherwise gone toward the cost of care.

The Monthly Maintenance Needs Allowance in the state of New York in 2014 is

$2931.

SUMMARY

Medicaid is important for a significant percentage of senior citizens, because

Medicare will not pay for long-term care. Nursing homes and assisted living

communities are very expensive, and most people cannot comfortably absorb

these costs out-of-pocket.

To qualify for Medicaid you must be able to demonstrate significant financial

need. There are asset and income limits. However, if a married person applies for

Medicaid, there are rules in place to protect the financial interests of his or her

spouse.

Medicaid Planning: What Can the Healthy Spouse Keep? www.myestateplan.com 6

The community spouse can keep half of shared assets up to a certain limit, and he

or she can continue to draw from income that is earned by the institutionalized

spouse.

It takes careful planning to qualify for Medicaid at the right time without losing a

great deal in the process. If you would1) like to discuss Medicaid planning with an

informed professional, set up a consultation with a licensed elder law attorney.

REFERENCES

Genworth Financial https://www.genworth.com/corporate/about-genworth/industry-expertise/cost-of-care.html LongTermCare.gov http://longtermcare.gov/

Medicaid Planning: What Can the Healthy Spouse Keep? www.myestateplan.com 7

About the Author

Mark S. Eghrari

Mark S. Eghrari is an attorney in private practice in Smithtown, New

York. He has been in practice since 1988. Mark S. Eghrari provides

extensive estate and tax planning services to individuals and

businesses. Mr. Eghrari’s primary focus is helping clients avoid

probate, minimize or eliminate Federal and State Estate taxes and

protect their assets from the high cost of nursing care, if they become

ill. Mr. Eghrari’s expertise is in providing unique and innovative

estate planning solutions that create a secure future for his clients and their loved ones. Mr.

Eghrari is a member of the American Bar Association and New York State Bar Association as

well as the National Academy of Elder Law Attorneys and the American Academy of Estate

Planning Attorneys.

Mr. Eghrari completed his undergraduate work at Lafayette College in Easton, Pennsylvania

and received his MBA in banking and finance from Hofstra University on Long Island. He

earned his Juris Doctorate from the Hofstra University School of Law, where he was a member

of the Law Review. While in law school, Mr. Eghrari gained practical experience in the

corporate tax department of Citicorp in New York city.

Mark S. Eghrari and Associates PLLC www.myestateplan.com 50 Karl Avenue, Suite 202 Smithtown, NY 11787 Phone: (631) 265-0599 Fax: (631) 265-0754