Posted by: BlogMaster | December 28, 2011

Special Alert: Update on Medicaid Law Changes

As a reader of this law blog, you know that in April 2011, New York State enacted a significant change to existing Medicaid laws. This change expands the reach of recovery for benefits paid on behalf of a Medicaid recipient from only the recipient’s estate (or that of their spouse) to now encompass non-estate property and assets. These may include a life estate in a deed, jointly owned accounts, and accounts with designated beneficiaries.  Life insurance is exempted from the statute.

The New York State Bar Association’s Elder Law Section has been working hard to clarify the law’s reach and to also address constitutional issues on whether the law would be retroactive to before April 1, 2011. 

Good news…

I am pleased to report that last week the Chair of the Elder Law Section announced that New York State intends to issue regulations (following a required statutory comment period of 60 days) to make the newly expanded Medicaid estate recovery effective as of the death of the Medicaid recipient (or their spouse, as applicable) on or after July 1, 2012 for assets and accounts other than life estate deed transfers.  These proposed regulations will also present a listing of the types of property that will be eligible for Medicaid recovery upon the death of the Medicaid recipient (and their spouse, as applicable).  

Unfortunately, there is still no clarification or change, as of this writing, on recovery against life estate deeds recorded before April 1, 2011 (the statute’s effective date) or the retroactivity for payment of Medicaid benefits if the recipient dies on or before July 1, 2012.  Additional details will be provided to you here in this blog whenever this office is informed.

Yet to be resolved…

Another unresolved part of the expanded recovery is the proposed treatment of retirement accounts.  Unless you as the consumer are successful in your efforts to change the opinions of our elected officials in the NYS Assembly and Senate, retirement accounts (IRA, 401K, etc.) may be subject to claims of repayment for Medicaid paid during the life of the recipient. 

This is troubling because current Medicaid law permits the Medicaid recipient and their spouse to own retirement accounts that are ‘exempt’ as resources, as long as the accounts are in ‘pay status’ (meeting the required minimum distributions for married persons, and higher distribution levels for single individuals), and to designate a beneficiary of those retirement accounts. 

By contrast, other laws ­– including NYS judgment and collection laws, federal bankruptcy laws, and federal ERISA (pension protection) laws – limit or prevent claims from being made against retirement monies.  

We will keep you informed here as we learn more about these issues.

Wishing you and your loved ones a very happy and healthy new year.

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