First, the good news: Despite another attempt by the New York governor to eliminate spousal refusal from this year’s budget for community-based care, the budget was passed by the legislature this week without this change.
What Is Spousal Refusal, And Why Is It Important?
Let’s say your dad is in a nursing home, but your mom is well and lives at home. Medicaid will only pay for your dad’s nursing home bills if he qualifies as poor — not having enough income to privately pay for the nursing home. The problem is that Medicaid counts both your mom and dad’s income in deciding if he qualifies for assistance.
They allow your mom a certain amount of income, but anything more than that and your parents lose the Medicaid assistance.
Especially here on Long Island, this often leaves your mom — known as the “well spouse” — with not enough income or assets to cover her basic housing and other needs.
One of the techniques attorneys use to protect people like your mom is file a document with the Medicaid application that your mom refuses to contribute income and assets to your dad’s long term care: so-called “spousal refusal.” Medicaid cannot legally be denied to the spouse in need. It’s sort of like getting divorced for tax reasons — without the divorce.
The Fly in the Ointment
For the past few years, the Department of Social Services (DSS) has been threatening lawsuits to recover the cost of care from the refusing spouse. Often, DSS does not follow through, or we can come to a settlement for much less than the full amount, and even so, DSS only seeks to recover the Medicaid rate, not the private pay rate, potentially saving thousands of dollars each month.
Finally, the Bad News
Even though the legislature did not eliminate spousal refusal in this year’s budget, or last year’s, New York’s budget is under pressure. Spousal refusal is only allowed in three states, and I suspect the Governor and other legislative forces will keep trying to get this passed.
Plan for the Elimination of Spousal Refusal
While spousal refusal is an excellent tool to use right now, when my clients are in a crisis and there is an immediate need to apply for Medicaid to get help, it’s clear that this strategy has a limited shelf life. You can avoid this problem by meeting with an elder law attorney now, and planning for the future. As the old saying goes: hope for the best, and plan for the worst.