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LTC Bullet: NY's Highest Court Rebuffs Aggressive Medicaid Planning

Wednesday June 10, 1998


The New York State Court of Appeals (New York's highest court) has spoken on the exploitation of Medicaid to finance long-term care for non-poor persons.

The court recently ruled that income must be considered first (before resources) when seeking to bring a Medicaid applicant spouse's Minimum Monthly Maintenance Needs Allowance (MMMNA) up to the minimum amount.

The ruling prevents excessive and unnecessary asset transfers where protecting the community spouse can be accomplished with transfers of income. The court's message of personal responsibility for long-term care leaves no doubt that, at least for this court, Medicaid is not an
inheritance protection program.

Below are excerpts from the court's decision in Golf v. New York State Dept. of Social Services, 1998 WL 151293 (April 2, 1998):

"[T]he MCCA [Medicare Catastrophic Coverage Act of 1988] was enacted to ensure that the community spouse was provided with an income above the poverty level.... It was not intended to offer a financial boon for applicants or to provide a route upon which one could bypass the obligation to contribute one's fair share of the costs associated with nursing home care. An agency's transfer of income, rather than resources, to the community spouse effectively serves the dual goal of ensuring the community spouse would lie [sic] comfortably and of protecting against the depletion of limited Medicaid resources by individuals capable of helping themselves.

"[W]e are mindful that the policy of the law is to prevent impoverishment of the community spouse; it is not to permit the sheltering of personal wealth at public expense. To the extent that the income-first method preserves the public fisc, clearly such a result inures to the benefit of all New York senior citizens in that additional resources are more readily available to meet the needs of eligible applicants.

"We reiterate that while the spousal impoverishment provisions serve to support those in medical need, they are not vehicles for enriching the family of the applicant. That some means of recoupment exist is no reason to create opportunities for sheltering assets."