As our parents age, we can find ourselves contemplating care options for them once they begin to develop health problems. An important part of estate planning is tackling the challenges of long-term care. Assisted living and medical treatments are expensive in New York and around the country, regardless of whether savings or insurance pays the bills. Those whose savings are depleted may find the premiums for long-term care insurance prohibitive when they are on a fixed income.
At the same time, the fixed income that retirees receive from Social Security or pension may make them ineligible for Medicaid. It is important for residents of Nassau and Suffolk counties to examine planning options early on for infirmity as well as the need for future cost-of-living resources. Some aspects of pre-planning are state-specific, especially for Medicaid eligibility or local resources for senior housing and financial assistance.
Medicaid in New York
Medicaid is a federal program with differing administrative approaches at the state level, including caps on income eligibility and spend-down options, as well as ways to protect a non-applicant spouse. Some assets such as IRAs or a 401K in payout status are exempt from the determination of eligibility.
In New York, Medicaid Managed Care has different types of long-term care that include differing levels of care for eligible recipients:
- Institutional/nursing home Medicaid
- Medicaid waivers/home and community-based services
- Regular Medicaid/Aged Blind and Disabled
Eligibility for this program is determined by the applicant’s combined income from Social Security, pension, alimony, or dividends, as well as assets in cash, savings, investments, or stocks. In New York, one spend-down option is the Community Spouse Resource Allowance that permits the non-applicant spouse to retain more of the couple’s total assets.
Pre-planning and reassessing assets
While many elderly individuals plan for long-term care through the mechanisms of trusts, a reverse mortgage, or annuities, it is worth exploring the possibilities or limits of government health plans. For example, people often do not realize until too late that Medicare does not cover long-term care of any kind.
Advance care planning for a loved one not only reduces the stress that the family is feeling, but also gives peace of mind that their parent will receive the kind of care they deserve.