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Medicaid Eligibility and theTreatment of Income and Assets under theNew York State Partnership for Long-Term Care(The only plan covered in this document is the Total Asset 3/6/50 plan)Prepared By:NYS Partnership for Long-Term CareNYS Department of HealthOne Commerce Plaza, Rm. 1620Albany, New York 12210https://nyspltc.health.ny.govJanuary 2020

DETERMINATION OF MEDICAID ELIGIBILITYFOR NYS PARTNERSHIP CONSUMER PARTICIPANTSREQUIRING NURSING HOME CAREThe New York State Partnership for Long-Term Care (NYS Partnership) has increased publicinterest in long term care insurance. To understand what the Partnership offers residents of theState and to evaluate whether it is appropriate for you to purchase a NYS Partnership long-termcare insurance policy, you must have a basic understanding of how eligibility for Medicaid fornursing home care is determined, particularly in regard to treatment of your income. The Medicaideligibility process is demonstrated for you below through a series of income scenarios whichillustrate how certain variables, including marital status and source of income, affect youreligibility for Medicaid nursing home care if you purchase a NYS Partnership policy.GENERAL INFORMATIONHow the Partnership Works:Medicaid coverage under the NYS Partnership is called Medicaid Extended Coverage. Eligibilityfor Medicaid Extended Coverage is based upon TIME. Individuals who purchase NYS Partnershippolicies and subsequently use three (3) years of nursing home benefits (3 years of nursing homedays) or its equivalent benefits, six (6) years of home care days (2 home care days counting as 1nursing home day), or some combination of the two which is the equivalent of three (3) years ofnursing home days may apply for Medicaid Extended Coverage. Even if benefits remain under aNYS Partnership policy, individuals may still apply for Medicaid Extended Coverage so long asthey have used the three years of nursing home equivalent benefits.The NYS Partnership permits a qualified applicant to apply for and receive Medicaid ExtendedCoverage regardless of the type or amount of resources he or she has. However, all INCOMErules in effect at the time of application for Medicaid Extended Coverage will apply indetermining one’s eligibility for Medicaid Extended Coverage.Implications of Income Eligibility on Your Decision to Purchase a NYS Partnership Policy:1. Participation in the NYS Partnership is not for everyone. If you decide to purchase a NYSPartnership policy, you must support the costs of your long-term care through somecombination of the NYS Partnership insurance coverage and out-of-pocket payments forany required co-payment during the period that you are using the required three years ofnursing home equivalent benefits. Individuals who are not able to afford the costs ofsupport during this time period without significantly reducing their resources shouldcarefully consider whether purchasing a NYS Partnership policy is appropriate for them.2

2. When evaluating whether to purchase a NYS Partnership policy, you must also look atwhether you can afford care without depleting your resources. If you can afford carewithout depleting resources because your income is sufficient to pay for the costs of yourcare, the NYS Partnership may not be for you. While you may qualify for MedicaidExtended Coverage without regard to your resources, you still may not qualify forMedicaid Extended Coverage if your income is too high. The Medicaid Extended CoverageWorksheet set forth below will show how income affects your eligibility for MedicaidExtended Coverage.3. Since you may apply for Medicaid Extended Coverage without regard to your resources,you are exempted from the transfer of resources penalty regulations if you participate inthe NYS Partnership. If you participate in the NYS Partnership, you may sell, transfer, orspend your resources, before, during, and after applying for Medicaid Extended Coverage.TERMS AND DEFINITIONS1. Maximum Community Spouse Monthly Income Allowance: Under the MedicareCatastrophic Coverage Act of 1988, a monthly maintenance allowance was established forthe non-Medicaid spouse who remains at home (community spouse). This amount isadjusted each year. The Monthly Income Allowance for 2020 is 3,216 per month. If thecommunity spouse has income which is less than the Allowance, income may becontributed by the nursing home spouse (if available) to bring the community spouse'sincome up to the current Allowance.2. Community Spouse Monthly Income Contribution: Where the community spouse of aMedicaid eligible nursing home resident has monthly income, which exceeds theMaximum Community Spouse Monthly Income Allowance, he or she is requested tocontribute up to 25% of any income over the current Allowance to the costs of care of theMedicaid eligible nursing home spouse.3. Net Available Monthly Income (NAMI): A patient's NAMI equals his or her income whichis available to offset the cost of care after all deductions have been made.4. Personal Needs Allowance (PNA): Medicaid recipients in nursing homes are permitted tokeep 50 per month from their incomes to pay for personal items.3

RESOURCESAll or a portion (depending on the policy purchased) of a qualified New York State Partnershipfor Long-Term Care policyholder’s resources are exempt from consideration in determiningMedicaid eligibility. Additionally, since resources are exempt from consideration in determininga qualified policyholder’s Medicaid eligibility, the transfer of resources provision (i.e., look-backperiod and penalty period) does not apply. Income produced from a resource can be considered indetermining eligibility for Medicaid Extended Coverage. See INCOME section below.INCOMEThe information below is an abbreviated overview of individual income taken into account foreligibility under Medicaid. For married couples, both incomes are considered when determiningeligibility. Where the income is distributed jointly to both spouses, it is assumed that each spouseshares an equal interest. Actual income contributions to the cost of care for the Medicaid eligiblespouse, however, depend on the personal income of each spouse.1. WHAT IS INCOME?Total monthly income is the gross amount received by the individual or generated by his/herassets. This includes but is not limited to: Pensions Social Security Income from Annuities/IRAs (See 3. ANNUITIES / IRAs: HOW ARE PAYMENTSTREATED?) Net Income from Rents Interest on Loans and Mortgages Dividends and/or interest from Stocks, Bonds (see exception below), Bank Accounts,CDs, etc., WHETHER OR NOT THE INDIVIDUAL ACTUALLY RECEIVESTHE MONIES. ROLLOVERS AND REINVESTED INCOME ARE STILLINCOME. Capital gain distributions, (e.g., from mutual funds, other regulated investmentcompanies, or real estate investment trusts), noted on “Internal Revenue Form 1099DIV, Dividends and Distributions,” whether paid as cash or reinvested.4

Some exceptions and items of note: Series E/EE Savings Bonds: Interest is NOT considered income. I Bonds: Interest is NOT considered income. Zero Coupon Bonds: Upon maturity, Medicaid considers interest as income. Capital Gains: Capital gains (e.g., from the sale of a mutual fund or real estate) areconsidered an increase in the value of the resource and are exempt under MedicaidExtended Coverage. * Note, however, that capital gain distributions (e.g., from mutualfunds), annotated on Internal Revenue Form 1099-DIV, are considered unearnedincome.*Please refer to Section 3, on page v in this document, which addresses how paymentsfrom annuities and IRAs are treated. Capital Appreciation: This is NOT considered income. Life Insurance: Where a person becomes the beneficiary of benefits under a lifeinsurance policy, the moneys are considered income in the month in which they arereceived. Dividends from life insurance are NOT considered income, but interest ondividends from a life insurance policy IS considered income. Spousal Income or “OTHERWISE AVAILABLE INCOME”: The income of thespouse at home may be adjusted by certain permissible deductions. The net result ofthis calculation is called "otherwise available income". Although other specializeddeductions exist, the most common permissible deductions from the spouse at home'sgross income are: Health Insurance Premiums (including premiums for long term care insurance); Incapacitated adult/child care costs (actual); and Court Ordered Support (Paid Out).5

2. HOW IS INCOME TREATED IN THE ELIGIBILITY DETERMINATIONPROCESS?Income eligibility for Medicaid is determined on a monthly basis. Because of this, Medicaiddifferentiates between periodic income and non-periodic income. Periodic income is receivedon a regular schedule, for example, once a month, once a quarter, once a year, etc. Someexamples of periodic income are pensions, annuities, and IRA withdrawals. Non-periodicincome is income received on an irregular schedule such as an inheritance, or an award.Non-periodic income is counted in the month in which it becomes available. After that, it isconsidered a resource. This means that if the individual were to receive moneys that wouldcause his/her income to exceed the cost of his/her care, he/she would be ineligible for Medicaidfor that month only, regardless of whether the money is all spent by the end of the month. Forexample, needed care is 5,000/month and a CD matures that, when the CD's interest iscombined with regular monthly income, gives the individual 7,000 that month. In thisinstance, the individual would be ineligible for Medicaid in that month but eligible in thefollowing month even if he/she merely deposits the extra amount.Periodic income is applied on a monthly basis regardless of how often it is received duringthe year. For example, if an annuity paid out once a year, the amount paid would be dividedby twelve (12) to establish total monthly income.3. ANNUITIES AND IRAs: HOW ARE PAYMENTS TREATED?All moneys received on a periodic basis from an annuity or IRA, whether received monthly,quarterly, semi-annually, or annually, are considered income regardless of whether suchmoneys represent a payout of interest or principal. However, if the total principal were to bewithdrawn in a lump sum, the money would be considered a resource.4. MAY I TRANSFER INCOME?Where the transfer or conversion of protected resources results in the transfer or loss of incomethat was earned by those protected assets, no transfer penalty shall apply. However, incometransfer other than through the transfer of income attached to protected resources may result inpenalties.6

NEW YORK STATE PARTNERSHIP FOR LONG-TERM CAREOFFICE OF HEALTH INSURANCE PROGRAMSNYS DEPARTMENT OF HEALTHMEDICAID EXTENDED COVERAGE ELIGIBILITY WORKSHEETIMPORTANT: This worksheet is provided to demonstrate, in general terms, how income istreated when Medicaid eligibility is determined for nursing home residents. This information ismeant for illustrative purposes only. This worksheet utilizes a simplified eligibilitydetermination process; therefore, the outcome of an actual application process may differ. Theresults of this worksheet are subject to the details of the applicant’s case and the Medicaideligibility rules in effect at the time of an actual application.HOW TO USE THIS WORKSHEETThe treatment of income under the Medicaid program differs for married couples and singlepersons. To assist you in estimating eligibility for Medicaid Extended Coverage based on you andyour spouse’s income under current Medicaid rules, select SINGLE or MARRIED, as applicable,fill in the blanks, and then refer to the appropriate SITUATION as directed. End notes with keyclarifications are located on the last page of the worksheet. Using approximate amounts for grossincome is acceptable since this exercise does not constitute an actual application for Medicaidbenefits.Note: For the purpose of this exercise, it is recommended that you investigate an approximationof the average private monthly charges of nursing homes in your area. You can find suchinformation from the New York State Partnership for Long-Term Care home page(https://nyspltc.health.ny.gov), from an insurance advisor, or by calling several nursing homes inyour area. Because nursing home charges vary across New York State, the determination ofMedicaid eligibility will vary under the NYS Partnership since it is largely determined bycomparing your income against the private nursing home charges in the nursing home situationspecific to you. After determining the approximate average monthly rate (or the actual rate for aspecific nursing home), use that dollar amount as the PRIVATE NURSING HOME RATE as youuse this worksheet.7

SINGLEIF YOU ARE A SINGLE INDIVIDUAL WITH NO SPOUSE.1. ENTER YOUR GROSS MONTHLY INCOME. 1 2. SUBTRACT 50.00. 2– 3. SUBTRACT ANY HEALTH INSURANCEPREMIUMS. 3– 50.003a. NET AVAILABLE MONTHLY INCOME. 4. IS NET AVAILABLE MONTHLY INCOME (Line 3a)EQUAL TO OR LESS THAN THE PRIVATENURSING HOME RATE?YES OR NOA) IF YES, NET AVAILABLE MONTHLY INCOME WILL BECONTRIBUTED TO YOUR NURSING HOME CARE ANDYOU ARE ELIGIBLE FOR MEDICAID EXTENDEDCOVERAGE.B) IF NO, YOU ARE NOT ELIGIBLE FOR MEDICAIDEXTENDED COVERAGE FOR NURSING HOME CARE.HOWEVER, IF YOU INCUR ADDITIONAL MEDICALEXPENSES, YOU MAY BE ELIGIBLE FOR MEDICAIDEXTENDED COVERAGE FOR OTHER SERVICES.8

MARRIEDIF YOU ARE A MARRIED COUPLE WITHNO DEPENDENT FAMILY MEMBER 41. ENTER GROSS MONTHLY INCOME OF THESPOUSE IN THE NURSING HOME. 1 2. ENTER OTHERWISE AVAILABLE MONTHLYINCOME OF THE SPOUSE AT HOME. 5 3. IS OTHERWISE AVAILABLE INCOME OF THESPOUSE AT HOME LESS THAN 3,216? 6IF YES, GO TO MARRIED: 1IF NO, GO TO MARRIED: 29YES OR NO

MARRIED: 1– 1. ENTER 3,216.63,2162. SUBTRACT OTHERWISE AVAILABLE MONTHLYINCOME OF THE SPOUSE AT HOME. 5– 2a. THE SPOUSE AT HOME MAY RECEIVETHIS AMOUNT FROM THE MONTHLYINCOME OF THE SPOUSE IN THE NURSINGHOME IF THE NURSING HOME SPOUSE’SINCOME IS SUFFICIENT.3. ENTER GROSS MONTHLY INCOME OF THESPOUSE IN THE NURSING HOME. 1 4. SUBTRACT 50.00. 2– 5. SUBTRACT THE COMMUNITY SPOUSE’SINCOME ALLOWANCE (LINE 2a).– 6. SUBTRACT HEALTH INSURANCE PREMIUMS3PAID BY THE SPOUSE IN THE NURSING HOME.– 6a. NET AVAILABLE MONTHLY INCOME.7. IS NET AVAILABLE MONTHLY INCOME (Line 6a)EQUAL TO OR LESS THAN THE PRIVATENURSING HOME RATE?1050.00 YES OR NO

A) IF YES, NET AVAILABLE MONTHLY INCOME WILL BECONTRIBUTED TO YOUR NURSING HOME CARE ANDYOU ARE ELIGIBLE FOR MEDICAID EXTENDEDCOVERAGE.B) IF NO, YOU ARE NOT ELIGIBLE FOR MEDICAIDEXTENDED COVERAGE FOR NURSING HOME CARE.HOWEVER, IF YOU INCUR ADDITIONAL MEDICALEXPENSES, YOU MAY BE ELIGIBLE FOR MEDICAIDEXTENDED COVERAGE FOR OTHER SERVICES.11

MARRIED: 21. ENTER OTHERWISE AVAILABLE MONTHLYINCOME OF THE SPOUSE AT HOME. 52. SUBTRACT 3,216. 6 – 2a. OVERAGE: AMOUNT OF OTHERWISEAVAILABLE MONTHLY INCOME OF THESPOUSE AT HOME WHICH EXCEEDS 3,216.63. MULTIPLY OVERAGE (Line 2a) BY 25%.3a. 25% OF OVERAGE (ROUNDED DOWN TO THENEAREST DOLLAR): THE SPOUSE AT HOME ISREQUESTED TO CONTRIBUTE THIS AMOUNTTOWARD THE COST OF CARE OF THE SPOUSEIN THE NURSING HOME.4. ENTER GROSS MONTHLY INCOME OF THESPOUSE IN THE NURSING HOME. 13,216 x 0.25 5. SUBTRACT 50.00. 2– 6. SUBTRACT HEALTH INSURANCE PREMIUMS3PAID BY THE SPOUSE IN THE NURSING HOME.– 7. ADD THE AMOUNT THE SPOUSE AT HOME ISCONTRIBUTING. (LINE 3a) 7a. TOTAL NET AVAILABLE MONTHLYINCOME.8. IS NET AVAILABLE MONTHLY INCOME (Line 7a)EQUAL TO OR LESS THAN THE PRIVATENURSING HOME RATE?1250.00 YES OR NO

A) IF YES, NET AVAILABLE MONTHLY INCOME WILL BECONTRIBUTED TO YOUR NURSING HOME CARE ANDYOU ARE ELIGIBLE FOR MEDICAID EXTENDEDCOVERAGE.B) IF NO, YOU ARE NOT ELIGIBLE FOR MEDICAIDEXTENDED COVERAGE FOR NURSING HOME CARE.HOWEVER, IF YOU INCUR ADDITIONAL MEDICALEXPENSES, YOU MAY BE ELIGIBLE FOR MEDICAIDEXTENDED COVERAGE FOR OTHER SERVICES.13

END NOTE1. See INCOME for a description of how income is defined under the NewYork State Medicaid program.2. Medicaid recipients in nursing homes are permitted to keep 50 per monthof their incomes as a Personal Needs Allowance (PNA).3. Health Insurance premiums include, for example, premiums for traditionalhealth insurance, Medigap insurance and long-term care insurance.4. A dependent family member includes a minor child, dependent child,dependent parent or dependent sibling of the institutionalized spouse orcommunity spouse, who resides with the community spouse, and who hasover 50% of his or her maintenance needs met by the community spouseand/or the institutionalized spouse.5. Otherwise Available Income refers to income that is available to theindividual. In determining otherwise available income, the followingdeductions, if applicable, shall be made: actual incapacitated adult/child careexpenses, court-ordered support payments and health insurance premiumspaid by the spouse at home.6. Under the Medicare Catastrophic Coverage Act of 1988, a minimummonthly maintenance needs allowance for the community spouse wasestablished. This amount is adjusted each year. The minimum monthlymaintenance needs allowance for 2020 is 3,216/month.14

spend your resources, before, during, and after applying for Medicaid Extended Coverage. TERMS AND DEFINITIONS 1. Maximum Community Spouse Monthly Income Allowance: Under the Medicare Catastrophic Coverage Act of 1988, a monthly maintenance allowance was established for the non-Medicai