“Pooled” charitable trusts have become very useful to Medicaid recipients who live in their own homes. Under this system, the “excess income” of a homecare Medicaid recipient can be contributed to a recognized pooled trust fund, and this excess income can be used to pay various household expenses of the Medicaid recipient. The pooled trust charges a small monthly administrative fee for this service and pays the household bills that are submitted with the balance of the excess income.
In 2014, the allowed monthly income limit for a homecare Medicaid recipient is $829.00. Monthly income above this amount is considered “excess income.” This pooled trust program has been a great advantage for New York residents who otherwise could not afford to continue living in their own homes if they need the assistance that the Medicaid program pays for.
However, effective August 5, 2014, the New York State Department of Health issued a directive to county Departments of Social Services (which administer the Community Medicaid program) advising them that a new state regulation directs that a married recipient of Community Medicaid no longer has the option of using a pooled trust for excess income.
During the past two years the Community Medicaid program in our area has become privatized. Home care services are now provided by Managed Long Term Care companies who contract with the State. Under the recent change, the married Medicaid recipient now must pay his or her excess income (the amount above $829.00 per month) to the Managed Long Term Care company as a contribution to the cost of care.
Under this new system, the spouse receiving Medicaid is now entitled to keep only $383.00 of his or her monthly income (and is also permitted to pay for his or her health insurance premium). The balance of that spouse’s income must be paid to the Managed Long Term Care company, subject to the following: The Medicaid recipient’s spouse (the “Community Spouse”) is entitled to keep either 1) all of his or her income if that income exceeds $2,931.00 monthly or 2) all of his or her income and enough of the Medicaid recipient’s income to give the Community Spouse a total of $2,931.00 monthly.
The result of this change is that any household income above $3,314.00 monthly (plus the cost of the Medicaid recipient’s health insurance premium) has to be paid toward the cost of care, unless that additional income belongs solely to the spouse of the Medicaid recipient. If the larger income earner is the Medicaid recipient, in many cases this change will result in financial hardship, since the excess income no longer will be available to pay household bills.
Many legal experts believe that the new state regulation violates federal law. Representatives from the New York State Bar Association are in the process of inquiring with officials at the federal government’s Centers for Medicare and Medicaid Services for a determination. Until a resolution is obtained, it appears that married recipients of Community Medicaid will need to abide by the new regulation, which means that a pooled trust is no longer available.
I intend to provide updates as this issue develops.
The rules regarding Medicaid eligibility are extremely complex, and many alternatives exist. Since each particular case has its own unique facts, the reader is cautioned that the above summary cannot be considered legal advice and should consult with an appropriate legal advisor. Please also note that the monetary figures stated herein are applicable to applications filed in 2014, and might vary in later years.
Copyright 2014 Joseph A. Bollhofer, Esq.
Joseph A. Bollhofer, Esq., is an attorney who practices law in the areas of elder law, Medicaid, estate and business planning and administration, and real estate. He is a member of the Elder Law, Real Property, and Surrogate’s Court Committees of the Suffolk County Bar Association and of the Elder Law and Real Property Law Sections of the New York State Bar Association. He has been serving area residents since 1985 and is admitted to practice law in New York and New Jersey. His office is located at 291 Lake Ave., St. James, NY. (584-0100). For reprints of this article and others concerning Medicaid, Elder Law and Estate Planning, send a request to firstname.lastname@example.org or visit www.bollhoferlaw.com