Evelyn Frank Legal Resources Program
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New York, NY 10018
(212) 971-7658 or Toll-free 1-866-811-5243
1. There is now one “resource limit” for Medicaid and Family Health Plus.
“Resources” are things you own that can be turned into cash. For example, property and bank accounts are resources. So are the cash surrender value of life insurance and other investments. Resources are also called “assets.” Before April 1, 2008, there were three different limits on the amount of resources an adult could have and still be eligible for Medicaid or Family Health Plus, depending on the adult’s circumstances.
Now, the same standards apply to any adult applying for Medicaid, Family Health Plus, and the Medicaid Buy-In for Working People with Disabilities (MBI-WPD).[1]
The new resource limits are significantly higher than before. As of April 1, 2008, the new resource limits are:
Family Size / 1 / 2 / 3 / 4 / 5 / 6 / Each add’lNew Resource Limit / $13,050 / $19,200 / $22,200 / $25,050 / $27,900 / $30,750 / + $2,850
These limits apply to all adults age 21 and over, including the elderly, regardless of whether they are disabled or have children living with them. This means that more people will now be eligible for Medicaid and Family Health Plus.
If you were denied Medicaid since April 1, 2008, because you had too much money in the bank, now is a good time to see if you might be eligible under the new rules. But remember – there are still different limits on the INCOME that one may receive in the different programs. (Income is new money received, such as wages, Social Security, pensions, IRA distributions, or rent. It can be regular, like Social Security, or infrequent, such as gifts. The Medicaid income limits are listed at The Family Health Plus income limits are listed at
Do these limits apply to all cash resources, like my IRA or other retirement funds?
Maybe. Different rules apply depending on your age and whether you are disabled.
-If you are age 65 or over, disabled, or blind, then your IRA or other retirement account WON’T count as a resource as long as you are taking the “required minimum distributions” under IRS rules. The distributions you take, however, will count as “income” and will increase your Medicaid “spend down.”
-If you are under age 65 and are not disabled or blind, then your IRA or other retirement account WILL count as a resource, even if you are over age 59½ and are taking “required minimum distributions” under IRS rules. This means that the IRA balance, along with all of your other resources, must be under the limit in the table above.
Does my life insurance policy count as an asset?
There are special rules about whether your life insurance and other “burial arrangements” count toward the resource limits above, or are “exempt,” which means they won’t be counted. These rules are different depending on your age or disability. All Medicaid recipients may have a “burial plot” and a pre-paid irrevocable funeral agreement with a funeral home to cover some funeral costs. These rules are complicated – in general:
If you are age 65 or over, disabled, or blind:
-You and your spouse may have a bank account labeled as a “burial fund” and/or a life insurance policy, as long as the combined balance of the bank account plus the cash surrender value of the life insurance is under $1500 for each of you. In addition, you may have a separate irrevocable pre-paid funeral agreement.
-If the cash surrender value of a life insurance policyis more than $1500, the amount over $1500 will be counted toward the resource limit. Now that the resource limit is higher, you may be able to keep your insurance. If not, you can reduce the cash value by taking out a loan against your insurance policy.
-See more information.
If you are under age 65 and are not disabled or blind:
-The cash surrender value of the policy is counted toward the resource limit – it is not exempt. But now that the resource limit is higher, you may be able to keep your insurance.
Rules for burial arrangements, cars and many other resources are complicated. For more information, see and/or consult a legal advisor through
I applied for and was denied Medicaid due to “excess resources” since April 1, 2008, but I’m eligible under the new rules. What should I do?
The State Department of Health will issue a new directive soon to explain this situation. However, we recommend that you re-apply for Medicaid as soon as possible. When you do, ask for your coverage to be “retroactive” back to April 1, 2008. Take a copy of the state Directive with you, which you can print out from
What will happen if I apply for Medicaid now?
It will take a few months for the Medicaid computer systems to be updated and staff to be trained. In the meantime, the Department of Health expects Medicaid staff to approve new applications for people who are eligible under the new rules. Some people under age 65 would have been placed in Family Health Plus before, because their resources were too high for Medicaid, but are now eligible for full Medicaid, which has more comprehensive coverage.
– OTHER GOOD CHANGES –
2. There is no drug- and alcohol-testing requirement for Medicaid.
Before, non-disabled people under age 65 had to undergo drug- and alcohol-addiction tests and treatment in order to apply for or renew their Medicaid coverage. This requirement has now been eliminated.
3. There is no “resource test” for any of the Medicare Savings Programs (MSP).
With a Medicare Savings Program (MSP), Medicare beneficiaries get two bonuses:
- New York pays your Medicare Part B premiums ($96.40/mo in 2008). Otherwise, these premiums are taken directly out of your Social Security check before you receive it. If you are in a Medicare Savings Program or MSP, your Social Security check will increase by $96.40/month.
- You automatically receive “Full Extra Help,” a federal government subsidy for Medicare Part D (prescription drug coverage). With this extra help, you have no deductible or “doughnut hole” for Part D; your monthly Part D premium is free or reduced; and your co-payments at the pharmacy are a maximum of $5.60 for brand name drugs and $2.25 for generics.
There are three different Medicare Savings Programs (MSP): which one you are in depends on the amount of your income (see the chart on the next page). Before, two of the MSPs (QMB and SLMB – see below) had strict limits on how much money you could have in the bank (resources): $4000 for a single person and $6000 for a couple. Now, there are no limits on how much you can have in checking and savings accounts, retirement accounts, investments, etc.
There are still limits on how much income you can have. If you are taking distributions from your IRA, the distribution counts as “income.” The chart below has the income limits.
Medicare Savings Program (MSP) / 2008 Monthly Income Limit * / What does the program do?Singles / Couples
QMB – Qualified Medicare Beneficiary Program / $887 / $1187 / -Pays your Medicare Part B premiums and can give you free Medicare hospital coverage.
-Will also pay your Medicare deductibles and coinsurance for doctors who take Medicaid.
-Entitles you to Full “Extra Help” for Medicare Part D
SLMB – Specified Low-Income Medicare Beneficiary Program / $1060 / $1420 / -Pays your Medicare Part B premiums.
-Entitles you to Full “Extra Help” for Medicare Part D
QI-1 – Qualifying Individual-1 Program / $1190 / $1595 / -Pays your Medicare Part B premiums.
-Entitles you to Full “Extra Help” for Medicare Part D
* Premiums you pay for other health insurance (such as a Medigap supplemental plan) are deducted from your income, so you might qualify even if your income is higher than these limits.
I wasn’t eligible for a Medicare Savings Program with the old rules, but now I am. What should I do?
The State has not yet issued an official directive in writing, but has said that local Medicaid offices should accept MSP applications going forward. We recommend that you go ahead and apply; keep proof of the date that you applied; and, if you’re applying for SLMB or QI-1 and were eligible under the new rules in April as well, ask for retroactive coverage back to April 1, 2008.
THIS DOCUMENT STATES GENERAL INFORMATION AND IS NOT LEGAL ADVICE.
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[1] Information about this Medicaid program for working people under 65 who are disabled is at