New York’s Changes in Medicaid Coverage
Potential Medicaid applicants (particularly those requiring long-term care) need to act quickly to prepare for changes in Medicaid. On April 3rd, 2020, New York State Legislature passed the Fiscal Year 2020-2021 budget, adding an additional lookback restriction in the application for Community Medicaid. This change, going into effect on October 1st, 2020, significantly lowers accessibility to the Medicaid program, meaning that seniors (65+) and disabled individuals will have to face greater obstacles to receive the program’s benefits, particularly for in-home care. Potential applicants need to act today to ensure their right to long-term care.
Why Medicaid Matters for Seniors and Disabled Citizens
Medicare is the federal health insurance program for people who are 65 years or older, have disabilities, or have End-Stage Renal Disease (permanent kidney failure requiring dialysis). It is funded by taxpayers through the Social Security Administration, and coverage is provided irrespective of income level. Patients often pay part of costs through deductibles or other small premiums. 
Notably, Medicare falls short in certain areas of coverage. Some examples of items and services not covered by Medicare include:
- Long-term (Custodial) care
- Dental Care
- Eye exams
- Cosmetic Surgery
- Hearing aids and exams for fitting them
- Routine foot care 
While Medicare Health plans and other supplemental insurances may cover some of these shortcomings and alleviate payment costs, long-term/custodial care is very frequently omitted from these plans. Seniors or disabled persons who require long-term care therefore need to purchase expensive long-term care insurance, pay out of pocket, or apply for Medicaid (the programs are dually applicable).
Overview: What is Medicaid?
Unlike Medicare, Medicaid is an assistance program that serves low-income people of all ages. It is a federal-state program, meaning that states and localities run the Medicaid system within certain federal guidelines. In New York State, there are two main types of Medicaid coverage—Chronic Medicaid and Community Medicaid. These Medicaid coverages provide different types of long-term care and have different application processes.
Types of Medicaid
Chronic Medicaid covers nursing home care and has much stricter rules and limitations than Community Medicaid. For example, while the Community Medicaid application omits the value of the home, Chronic Medicaid only omits the value of the home in the case that a spouse or dependent lives in the home. This, among varied income requirements, makes Chronic Medicaid coverage more difficult to qualify for.
Because many seniors have assets that would disqualify their eligibility for Medicaid programs, they often spend down and transfer their assets to protect their wealth. To prevent this, Chronic Medicaid has historically had a 5-year “look-back” period, meaning that uncompensated gifts and transfers of property (below fair market value) in the last 5 years will result in a period of ineligibility.
Community Medicaid covers in-home care and has historically been much easier to qualify for, mainly due to the absence of any “look-back.” While applicants to Community Medicaid still must meet certain net value requirements for Medicaid eligibility, they have historically been able to spend down and transfer their assets up to the month of application. 
As a result of the recent changes, starting October 1st 2020, there will now be a 30-month “look-back” applied to Community Medicaid, meaning that uncompensated gifts and transfers in the 2.5 years prior to application will now incur an ineligibility period with a length depending on the degree of wealth transfer.
Medicare falls short in providing long-term care, leaving Medicaid as the cheapest, most plausible pathway. However, the newly imposed 2.5-year lookback period on Community Medicaid (in-home care) adds additional restrictions on eligibility, making any type of long-term care significantly more difficult to obtain. Clients who want to qualify for Medicaid need to address where their assets are held currently immediately in order apply without the new lookback restrictions. Certain required minimum distributions (RMD) can also be accelerated to change the amount of assets counted for Medicaid eligibility. Fortunately, we can help! If you have questions, feel free to give our office call at (631) 393-2888.
Craig J. Ferrantino is a Registered Representative offering Securities and Advisory Services through UNITED PLANNERS FINANCIAL SERVICES, Member FINRA, SIPC. Craig James Financial Services, LLC and United Planners are not affiliated.
  “What is the difference between Medicare and Medicaid?” U.S. Department of Health & Human Services. 2 October 2015. <https://www.hhs.gov/answers/medicare-and-medicaid/what-is-the-difference-between-medicare-medicaid/index.html> Accessed 4 August 2020.
 “What’s not covered by Part A & Part B?” Medicare.gov. <https://www.medicare.gov/what-medicare-covers/whats-not-covered-by-part-a-part-b> Accessed 4 August 2020.
 Krooks, A. Bernard. “The Difference Between Chronic Medicaid & Community Medicaid in New York State.” Littman Krooks LLP. 7 July 2019. <https://www.littmankrooks.com/2019/06/the-difference-between-chronic-medicaid-community-medicaid-in-new-york-state/> Accessed 4 August 2020.
 McDonough, Caroline. “Changes to Medicaid Under the New York State 2020 Budget.” Center for Elder Law & Justice. 17 April 2020. <https://elderjusticeny.org/changes-to-medicaid-under-the-new-york-state-2020-budget/#:~:text=Beginning%20October%201%2C%202020%2C%20the,care%20services%20in%20the%20community.> Accessed 4 August 2020.