The average cost of nursing home care in New York is astounding!  The general range is between $13,000-$20,000 per month. There are three forms of accepted payment: 

• Private pay (from your own pocket); 
• Long-term care income (if you are fortunate enough to have a policy); or 
• Medicaid. 

Most seniors are concerned with the exorbitant costs of nursing home care and dislike the prospect of depleting their hard-earned assets to pay for it, however, there is a viable solution. If you do not have a long-term care policy or if your policy is short on coverage, you can engage in proper long-term care planning to avoid paying for a nursing home. 

If you have a long-term policy, you should not rely solely on your policy coverage. Most long-term care policies have gaps and/or a set maximum pay-out (i.e.- 3 years and not for your lifetime).   

In either case, you should seek the advice of an elder law attorney to advise you of your planning options. Medicaid has lots of complex rules, including, exemptions, look-back periods, and transfer penalties. An experienced attorney can assist you in navigating your options including transferring assets based on an exemption that poses no penalty. If an exemption does not exist, then for every $14,012 a Long Island resident gifts or transfers, the Department of Social Services imposes a one (1) month penalty for Medicaid services (from the date of the filing of your application). The look-back period is currently five (5) years. For example, if a house valued at $650,000 is transferred into a Trust, the applicant would not qualify for Medicaid coverage for 46.3 months or 3.9 years ($650,000/14,012= 46.3 months). The transfer would be discovered if it is within the 5- year look-back period preceding the filing of the application. 

A Medicaid Asset Protection Trust is an effective mechanism for safely transferring your home and other assets. A Trust is preferred over outright gifts to family members. The Trust avoids probate, protects against the creditor and/or marital issues of the beneficiaries, provides for preferential tax treatment, and allows for flexibility. The Trust can be collapsed if the person who created it needs to enter a nursing home before the look-back and/or penalty period has elapsed.  

A common misconception is that a nursing home resident receiving Medicaid benefits would be provided differential (lower level) treatment as opposed to a private pay resident. This is false information! All nursing homes in New York State accept Medicaid and most of the residents are Medicaid recipients. The medical staff and caretakers cannot discriminate or distinguish between private pay residents and Medicaid recipients.    

So, how can I avoid paying for a nursing home? The answer is… by properly planning! Please contact our law firm to speak with a qualified elder law and estate planning attorney to tailor a long-term care protection plan for you or your loved one.