By: Sanford R. Altman, Esq., retired

Published: 4/10/12

Expanded estate recovery for Medicaid is no more!

For those who have been following my column, you know what this means. In last year’s state budget bill, a provision was slipped in affecting the families of everyone who ever received Medicaid.

It allowed the state to dig into the estates of all past Medicaid recipients and pay itself back for every penny it spent on them. This legalization of state-authorized “grave robbing” was planned to include IRAs, savings accounts left to your grandchildren, and even your interest in your home. Now, a year later, this threat to the well-being of the families of seniors has been repealed.

How did this happen? It was a joint effort. Groups including the state Bar Association’s Elder Law Section and the New York State Chapter of the National Academy of Elder Law Attorneys negotiated hard and helped make those in power see the evils of this law.

Perhaps even more important were the readers of this newspaper and others throughout the state who expressed outrage to their legislators, who responded and killed the bill. Among legislators to whom we should be grateful are Assemblywoman Aileen Gunther and state Sens. Bill Larkin and John Bonacic.

‘Spousal refusal’ kept intact

And there is more good news. You may recall that, just to add insult to injury, the governor had looked to add a provision in this year’s budget to end the practice of “spousal refusal.” This change would have forced healthy spouses to impoverish themselves so their ill spouses could receive Medicaid for long-term care.

Aside from making it more difficult for seniors to become eligible for Medicaid, ending spousal refusal had the potential to force more seniors into nursing homes and cause an increase in marriages of many years ending in divorce.

Now, as a result of the same joint efforts, eliminating spousal refusal is no longer in the new budget.

Good news for estate plans

What does all this mean? First, those who have taken responsible steps and have their elder law and estate plans in place can – at least for now – rest easy. If you deeded your home to your children while retaining life rights to live there, the protection remains in place. Your children’s rights to your home when you pass away also remain intact. For the current generation of seniors, retaining “spousal refusal” can prevent many healthy New Yorkers from being thrown into poverty when spouses need long-term care.

Even more important is the end – or at least a slowing – of the pattern of taking benefits from seniors to help balance the budget. This is the first time in my more than 30 years of practicing law that I have seen the government reverse provisions that negatively affected seniors’ rights regarding Medicaid. While we must be vigilant for the next assault, we now know the government will listen to seniors. This, in itself, is a great victory.