Medicaid And Spousal Refusal Planning

Spousal refusal is a Medicaid eligibility strategy that currently only available in New York and Florida, to the best of my knowledge. It is an incredibly powerful tool to fight the potential impoverishment of a husband or wife with a spouse who needs assistance from Medicaid to pay for nursing home care, assisted living, or even care in the home. This rule allow Elder law attorneys to re-title assets to the “well spouse”, then have the “un-well” spouse apply for Medicaid benefits, based only upon their personal assets and income. This allows spouse who does not need care to continue to maintain the home and lifestyle that the couple had enjoyed prior to the need for care.

Spousal refusal is a complicated process and should only be done with the advice and assistance of an attorney who has Medicaid planning as a primary focus of the practice.

Governor Cuomo’s has previously floated the idea of eliminating spousal refusal planning. Thankfully for those in need, it was beaten back. However, we are now in the midst of the Covid19 spending and economic downturn. The federal government and state governments are spending at record levels, and tax revenues are plummeting as people are not working, traveling or spending.

Revenue enhancements must come from somewhere, and Medicaid expenditures are an easy target.
The first salvo was fired last week when the Governor announced a brand new 30 month “look-back” period on applications for Medicaid services in the home or for assisted living. This was not the case previously.  You will need to have your planning in place before the law goes into effect October 1, 2020, to avoid that look back period, should you need help in the future.

I personally believe that before the end of the year, Congress will be increasing the Look Back period for nursing home Medicaid to somewhere between 7-10 years. Again, this is about cutting spending and putting the cost onto the middle class.

Back to the state level, I foresee the Governor re-visiting Spousal Refusal as a way to decrease Medicaid spending.  With the economy the way that it is, I do not think the legislature of lobbying will defeat such a proposal this time.

There is always a small window to get planning done under the current laws and be grandfathered in but continuing to procrastinate might cause you to lose your home and life savings. Because of all the changes, right now is a the most more important time to put a plan in place to protect your future, your family and your legacy.

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