Why pay the nursing home when you can pay for funeral expenses?

While it has long been a planning option to pre-pay funeral expenses for the Medicaid applicant, that is no longer the only option.

Why pre-pay the funeral? Because in order to qualify for Medicaid, you have to have assets below $14,550 (in New York) with certain exceptions (such as a home and when the applicant has a community spouse.) If you are over-resourced, you can spend down your assets and qualify for Medicaid.

In New York, Medicaid has recently issued a ruling allowing for the pre-payment of funeral expenses for family members with the funds of the Medicaid applicant. Family members are defined in the ruling as “a spouse, minor and adult children (including adoptive children and step-children,) brothers, sister, parents, adoptive parents and the spouse of those individuals as long as the marriage is in effect.” 11 OHIP/ADM-4.

So, if you have excess resources and are seeking Medicaid, then you may want to consider this option. When done prior to the month that Medicaid is being requested, pre-paying funerals for family members is a viable option and one that will ensure that the applicant’s funds are utilized by family members. These plans need to all be irrevocable pre-paid plans, but will allow for other options when an applicant has just a little more than the Medicaid allowable limits for assets.

So if your family member is faced with the need for long-term care in a nursing facility, why aren’t you utilizing this exception rather than paying for the facility for a month or two?

For more information on Medicaid, you can download a free Medicaid Guide for New Yorkers here.