and a partner at Enea, Scanlan & Sirignano,
LLP, a White Plains-based law firm that
concentrates its practice in elder law; wills,
trusts, and estates; Medicaid planning and
applications (home care and nursing home);
guardianship proceedings for the disabled
(contested and non-contested); and special
needs planning for the disabled.
Medicaid is a valuable resource to consider when faced with the prospect of financing the cost of long-term care. Yet, many are under the impression that Medicaid is only available for those who are indigent and, as a result, resort to exhausting their hard-earned life savings to cover the expense of a home care aide or a stay at a skilled nursing facility. It is true that there are asset and income limits that must be met to financially qualify for Medicaid, but this is not the end of the discussion. There are a multitude of ways that one can become eligible, even when one’s income and/or resources exceed the Medicaid threshold. One of these options is known as “Spousal Refusal” (SR).
While the term may sound harsh, SR is a Medicaid planning strategy that allows an “ill” spouse whose resources exceed the Medicaid financial eligibility limit to transfer assets to a “well” spouse in order to financially qualify for Medicaid. When the ill spouse applies for Medicaid, an SR form is signed by the well spouse and submitted with the application. The form states that the well spouse refuses to contribute their income and/or resources toward the cost of the ill spouse’s medical and non-medical care, thereby allowing the ill spouse to receive Medicaid benefits.
As spouses are legally obligated to support each other in NY State, the ill spouse also must execute a form assigning to Medicaid their right of support from the refusing spouse. This assignment of support triggers Medicaid’s right to seek recovery from the well spouse of the amounts expended on the ill spouse’s care. There is no guarantee, however, that Medicaid will pursue this right; and even if they do, Medicaid can only go after the well spouse for the amount they expended (the Medicaid rate), which is approximately 50% of the private pay rate.
Moreover, SR claims are not cut and dry—often they can be negotiated where a discussion is facilitated regarding the well spouse’s current expenses and future need for care. As such, even if an SR claim is pursued, from a financial perspective, in many circumstances one is better off submitting a SR than not submitting one. Also, once an ill spouse has been approved for Nursing Home Medicaid (NHMA) and 30 days have passed from the approval date, the well spouse can engage in “post-eligibility planning” and transfer assets to an Irrevocable Medicaid Asset Protection Trust for additional protection, which will only disqualify the well spouse for NHMA for up to 5 years.
To be clear, SR is still secondary to engaging in Medicaid planning for both spouses. By engaging in long-term care planning when both spouses are healthy (and far enough in advance for both spouses to get past the 5-year lookback period for NHMA), spouses can enjoy Medicaid protection without the fear and uncertainty of SR claims.
