The likelihood that you (or your spouse if you are married) will need long-term care increases dramatically as you age. If long-term care does become necessary, the cost of that care will be substantial. While Medicaid may be able to help cover long-term care expenses, the Medicaid eligibility requirements are complex and often convoluted. One of the significant concerns couples frequently have when applying for Medicaid is how to ensure that the healthy spouse (referred to as the “community spouse”) does not face financial hardship as a result of the other spouse’s need for long-term care. This is where Medicaid’s “spousal impoverishment” rules come into play. To ensure that you are prepared for your “Golden Years,” the Long Island attorneys at Eghrari Law Firm explain the Medicaid spousal impoverishment rules for New York.
Why Might I Need Medicaid in New York?
As a senior, you will likely rely predominantly on Medicare to cover your health care expenses. Unfortunately, however, Medicare does not pay for long-term care (LTC). The same is true for most private health insurance policies. At an average yearly cost of over $175,000 in New York, most people cannot afford to pay for LTC out-of-pocket. Fortunately, Medicaid does cover LTC expenses; however, Medicaid eligibility is based on income and asset limits and when a married couple applies for Medicaid for one spouse, the financial situation of both spouses is considered. This is where the spousal impoverishment rules come into play to ensure the community spouse is not left destitute.
The Community Spouse Resource Allowance (CSRA)
In New York, Medicaid’s spousal impoverishment rules are designed to protect the financial well-being of the community spouse while ensuring the spouse requiring care can still qualify for Medicaid. One of the most critical protections under the spousal impoverishment rules is the Community Spouse Resource Allowance (CSRA). The CSRA sets a limit on the amount of countable assets the community spouse is allowed to retain while still allowing the other spouse to qualify for Medicaid.
In 2024, the CSRA in New York allows the community spouse to keep 50 percent of the couple’s assets, up to a maximum of $154,140. If 50 percent of the couple’s assets is under $74,820, the non-applicant spouse can keep 100 percent of their assets, up to $74,820. This amount is intended to provide financial stability for the community spouse while ensuring that Medicaid is available for the institutionalized spouse’s care. Countable assets typically include bank accounts, investments, and other financial resources. However, certain assets, such as the couple’s primary home (if it falls within Medicaid’s equity limits), a vehicle, and personal belongings, are exempt from Medicaid’s asset calculation.
Some assets are considered exempt, meaning they are not counted, when determining eligibility for Medicaid in New York. Your home, for example, is exempt if you or your spouse live in it. If there is no spouse in the home, there is a home equity interest limit of $1,071,000 (in 2024).
Monthly Maintenance Needs Allowance (MMNA)
Another critical component of the spousal impoverishment rules is the Monthly Maintenance Needs Allowance (MMNA) which is called a Community Spouse Monthly Income Allowance (CSMIA) in New York. This provision ensures that the community spouse has enough income to cover living expenses while the institutionalized spouse is receiving Medicaid-covered care.
In New York, as of 2024, the community spouse is entitled to retain a minimum of $3,853.50 per month in income. If the community spouse’s income is below this threshold, they may be entitled to receive a portion of the institutionalized spouse’s income to make up the difference. This allowance ensures that the healthy spouse can maintain a reasonable standard of living without being financially drained by the cost of long-term care. If the non-applicant spouse already has a monthly income of $3,853.50 or more, they will not receive a CSMIA. Medicaid will also request that 25 percent of the “excess” income (over $3,853.50 / month) go towards the applicant spouse’s care costs. An applicant spouse in this situation can institute Spousal Refusal.
Do You Have Additional Questions about the New York Spousal Impoverishment Rules?
For more information, please join us for a FREE estate planning seminar. If you have additional questions about the New York Medicaid spousal impoverishment rules, contact the Long Island Medicaid planning attorneys at Eghrari Law Firm by calling us at 631-265-0599 to schedule your appointment.
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