The Nelson A. Rockefeller Institute of Government

Under Medicaid’s rules, an individual’s income and assets are taken into consideration when determining his or her eligibility for long-term care coverage.

Those having either income or assets that exceed the annual limits are not eligible. Applicants who transferred their assets (to other family members or to a trust, for example) within five years of applying for Medicaid long-term care coverage are also not eligible. According to a March 2009 report published by the Nelson A. Rockefeller Institute of Government (Rockefeller Institute) and funded by the New York Health Foundation (NYHealth), there is substantial variation and difference in the magnitude of Medicaid denial rates of long-term care coverage across New York’s 62 counties. With a Phase 2 grant from NYHealth, the Rockefeller Institute conducted a study to uncover possible reasons for discrepancies in denial rates and provide actionable recommendations to standardize practices throughout the State.

To be eligible for Medicaid long-term care, applicants must meet income and asset rules, and not have transferred assets (e.g., to another person, a trust, or annuity) within five years of the application. According to the Phase 1 grant, statewide, the transfer of personal financial assets resulted in denying an average of 7% of Medicaid long-term care applications during the last 10 years. However, the study found wide variation in the rate of denials due to asset transfer with some counties denying close to 50% of applications and others denying less than 1%. Among the State’s larger counties, the study found higher-than-average rejection rates in Rockland (24.2%), Ulster (22.6%), Saratoga (14.6%), and Suffolk (14.5%) counties. In Westchester (0.5%), Dutchess (1.0%), Schenectady (1.2%), Rensselaer (1.3%), Orange (1.4%), and Erie (2.1%) counties, rejection rates were well below the statewide average. These disparities may stem from differences in how the rules are understood and applied across the counties. The Phase 2 grant will seek to identify the factors driving this variation, the potential cost impact to the State, and specific actions the State and counties can take to minimize variation in denial rates. Smoothing out county-level differences has large cost implications; Medicaid is the largest funding source for long-term care in New York State, and more than 40% of the $49 billion being spent on Medicaid in 2009 is for long-term care.