Many elderly New Yorkers reside in nursing homes, and many of those who do rely on Medicaid to cover all or a portion of the costs. The Medicaid program is funded by both the federal and state government, and there are strict financial tests in place that determine eligibility.
One of those tests is the maximum amount of income that a person can have in order to receive financial aid. In most states, it is based on Supplemental Security Income. There are also limits on the amount of assets that a prospective patient has. This latter test often results in people having to spend down their resources until they get below the limit. In some cases, nursing home patients will use their own funds until they qualify.
Under current federal Medicaid law, it is assumed that when a married couple owns an annuity jointly and then one of the spouses enters a nursing home, the entire annuity is deemed to be owned by the other spouse. Proposed legislation that is under consideration by the House of Representatives would change that, however. If enacted, the bill would attribute half of the value of annuities that were purchased out of marital assets within the five-year period prior to the date of entry into the nursing home to each spouse. The legislation has been supported by long-term care insurance providers.
If enacted, the bill might prompt a significant change to existing Medicaid planning, as annuity purchases have heretofore played an important rule. People who are assessing their long-term care needs in this regard might want to meet with an attorney to discuss other alternatives. The attorney could conduct an evaluation of the couple's finances in order to see what might be an advisable approach to the issue.