Medicaid planning is a part of many estate plans. There are certain eligibility income standards for Medicaid and many people have income above the standards. When this happens, an applicant may have to “spend down” income before Medicaid will pay remaining medical costs.
The income standards depend on whether an applicant is in a nursing home or in the community. For an applicant living in the community, the income standard is $809 for an individual and $1,192.00 for a couple. There is a $20.00 income disregard. For an applicant residing in a nursing home, however, the income standard is $50.00.
Generally any income in excess of the standard must be used to pay medical costs in order to be eligible for Medicaid. Many people have income above the eligibility standard. New York is a “spend-down” state which means that an individual is eligible for Medicaid when his or her medical expenses exceed the income overage. For example, an individual with income of $1,029 per month has an income overage of $200.00. Once that individual incurs medical expenses of $200.00 per month, he or she will be eligible to have Medicaid pay all other medical costs.
Medicaid counts earned and unearned income. Earned income is income received as a result of working. Unearned income consists of pensions, benefit payments such as Social Security, and dividends and interest. There are many planning strategies to address eligibility for Medicaid and to protect personal assets in the process. If you have questions regarding Medicaid planning, consult with an experienced Elder Law Attorney.