Our Skilled Elder Law Attorney Explains Medicaid Spousal Refusal and How it Impacts Your NY Long-Term Care
The costs of long-term care can be astronomical, and you may wonder if there are financial strategies you can use to help pay for those costs. One strategy that is legal in New York is called “Medicaid spouse refusal.” When couples use this strategy, one spouse refuses to use their assets to help pay for their partner’s care.
If you can’t afford long-term care and need Medicaid benefits, the elder law attorney at Alatsas Law Firm, Theodore Alatsas, Esq., can discuss this strategy with you and whether or not it makes financial sense to consider it.
What Is Medicaid Spousal Refusal?
Medicaid spousal refusal is a legal strategy some couples in New York choose that allows the healthier spouse (called a community spouse) to refuse to contribute their income and assets toward the cost of care for the ill or disabled spouse (institutionalized spouse) when that person wants to apply for Medicaid. This strategy is used to preserve the community spouse’s financial stability and independence while ensuring the institutionalized spouse receives the care they need.
How Medicaid Refusal Works in New York
New York is one of only two states that allows Medicaid spousal refusal. Here’s how it works:
1. Apply for Medicaid. Once the ill/disabled spouse is out of or close to running out of money/assets, they apply for Medicaid to get their long-term care covered. Note that New York, like many states, has a 60-month/five-year “look back” period for institutional Medicaid.
2. Declaration of refusal. The spouse who refuses to pay should work with an elder care attorney to create and submit a statement of refusal to Medicaid. This is a formal declaration that they will not use their income or resources to pay for the institutionalized spouse’s care.
3. Medicaid eligibility. After the declaration of refusal, Medicaid will assess the institutionalized spouse’s eligibility based solely on their income and assets, disregarding the community spouse’s financial resources.
Advantages and Disadvantages of Medicaid Spousal Refusal
It’s important to talk to our elder law attorney about the pros and cons of using the Medicaid spousal refusal strategy. While it can be beneficial, it also has potential drawbacks.
Pros
- Financial protection. The community spouse’s income and assets remain untouched, ensuring their financial stability.
- Medicaid eligibility. The institutionalized spouse can often qualify for Medicaid more easily as they will meet the income and assets guidelines, ensuring they will be covered by Medicaid for the long-term care services they need.
- Asset preservation. Not only does this strategy protect the community spouse’s income, it can also help keep assets in the family to be passed on to family members after death.
Cons
- Potential legal action. Submitting the refusal is no guarantee your spouse’s income will be excluded. The state may file a lawsuit against the community spouse to recover the costs of care that the institutionalized spouse needs.
- Moral and ethical concerns. Some people are uncomfortable with the idea of refusing to support their spouse financially, even if there is a legal way to do so. Or it may create bad will and marital problems for the couple.
- Complexity and uncertainty. The process of filing a Medicaid spousal refusal form can be challenging. It’s best to have an elder law attorney help with the filing necessary if you pursue this option. Even with the best advisor, outcomes may vary.
Discussing Spousal Refusal Options With an Elder Law Attorney
Deciding whether to pursue Medicaid spousal refusal requires careful consideration. You should work with a lawyer who can provide advice and guidance throughout the process and will support you in your efforts. Your elder law lawyer will:
Evaluate Your Financial Situation
Your elder law attorney will assess the financial positions of both spouses to understand the potential impact of spousal refusal. They will consider your current income, assets, debts, and expected future financial needs, as well as funding goals for the future.
Consider the Long-Term Implications
Your lawyer will discuss the long-term implications for both spouses, including the care the institutionalized spouse needs. While spousal refusal may provide immediate financial relief, you may need to consider potential legal actions and the ethical dimensions of this decision.
Provide Professional Guidance
An elder law attorney with experience in Medicaid spousal refusal in New York can provide information about the success of other cases and what strategies have worked or not worked in the past. They can help you understand all of the potential risks and legal issues and help you decide on the best course of action for your marriage and your specific circumstances.