Most adults preparing for retirement don’t want to depend on Medicaid for their care as they get older. Only those with limited income and assets will even qualify for New York Medicaid in the first place. You might expect Medicare to provide you with the support you need, especially if you have supplemental private coverage of your own.
You may eventually discover that there are big gaps in Medicare coverage. If you require nursing support in your home because of medical issues as you age or need to move into a nursing home, Medicaid will be your only option for paying for those costs, as Medicare will not cover such treatment.
If you don’t plan ahead before applying for Medicaid in New York, you run the risk of one of the two big financial consequences below.
You could be subject to a penalty
When you apply for Medicaid, the state will look back at your recent financial records. Years of transfers will be subject to state scrutiny. If you make transfers or gifts in the five years before you apply for benefits, those could trigger a penalty.
The state will determine the value of the assets given away or transferred and convert that into a number of months of care. You will have to find some way to pay for the care that you need for that many months until Medicaid will start covering you.
Your estate could be subject to recovery efforts
You can qualify for Medicaid based on your income and assets even if you own a valuable home. The state may not penalize applicants for owning a house, but they will absolutely come after that property when the Medicaid recipient dies.
The New York estate recovery program will seek full repayments of all of the medical coverage someone received prior to their death. Even if that means forcing the sale of someone’s home, New York will pursue full recovery if possible from someone’s estate.
When you have protected certain assets before you apply for Medicaid, you won’t have to worry about paying for care or leaving something for the people you love. Recognizing the value provided by Medicaid planning as you grow older can help you protect yourself and your closest loved ones.