It's no secret New York -- like many states -- is facing a significant budgetary crisis. Medicaid is one of costliest programs administered by the state, and not surprisingly Gov. Cuomo's proposed budget includes significant cuts to Medicaid spending.
From an elder law perspective, the most dramatic of the proposed Medicaid changes is in the area of Community Medicaid. Under present law, there are no "transfer penalties" associated with a Community Medicaid application. That is, a medically-needy person living in the community (e.g., other than in a nursing home) can transfer all their non-exempt assets (e.g, assets excluding the home and a $13,800 resource allowance) to children or other persons and immediately qualify to receive Medicaid services. The proposed legislation would incorporate a sixty-month "look back" period for non-exempt transfers, the same period that is used for eligibility for the nursing home Medicaid program. Non-exempt transfers made during the look back period would result in a period of ineligibility for Community Medicaid, the duration of which would be determined by the amount of the non-exempt transfers made during the look back period.
The proposed rules also call for the elimination of "spousal refusal," which currently permits a spouse to refuse to make his or her assets or income available for determining the Medicaid eligibility of the other spouse. Spousal refusal is used routinely in New York to permit an ill spouse to obtain Medicaid coverage without requiring a spend down of the couples' assets. Only a handful of other states (the most prominent of which is Florida) permits spousal refusal under any circumstance. Note that the budgetary proposal does not appear to eliminate spousal refusal for nursing home Medicaid cases.
Since enacting controversial legislation is the ultimate "sausage making" process, the final budget is sure to include significantly different provisions than are found in this initial proposal. Nonetheless I expect that the final bill will include at least some dramatic changes to the Medicaid program that will affect seniors and their families. I will be sure to keep my readers informed as developments unfold.