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This page is about a Medicaid strategy called “Spousal Refusal.”   Certain provisions of New York law are important to this discussion:

  • Under New York law, spouses who are legally married must support each other for as long as they are married and both are alive. If the spouses are currently married, the financial support one spouse gets from the other is called spousal support.
  • Under New York law, spouses may convey or transfer real or personal property to each other.
  • Under New York Medicaid laws, one spouse may refuse to support the other. This is called “Spousal Refusal.”

While these laws appear contradictory, in fact they all come into play in a Spousal Refusal scenario.  Here is how it works:

Let’s consider a married couple where one of the spouses (the husband) becomes chronically ill and requires nursing home care.  The couple has substantial assets, and a majority are in his name.  As a result he is not eligible for Medicaid, as his “resources” far exceed the Medicaid eligibility level (in 2021, $15,900).

The husband decides to transfer all of the assets in his name to his wife.  As a result, he is now Medicaid eligible.

Medicaid, relying on the spousal support obligation, takes the position that the wife should make her money available to pay for the husband’s care.  But the wife refuses – and signs a “Spousal Refusal” form.

What now?  In the face of the wife’s “Spousal Refusal,” Medicaid must pay for the husband’s nursing home care.

Signing a Spousal Refusal doesn’t mean you’re exempt from economic support of your husband or wife.  It just means Medicaid can’t deny benefits to your spouse because you’ve refused support.  Medicaid is obliged to provide services to the ill spouse.  However, in these cases, Medicaid is permitted to, and often does, pursue legal remedies at some point after they have been providing services.  Their goal is to enforce your obligation and recoup the cost of benefits they have provided, to the extent possible.

Even if Medicaid asks for reimbursement of the cost of your spouse’s care, however, spousal refusal may still be effective, for two reasons.  First, Medicaid will ask you to reimburse its costs, and the rate that Medicaid pays to providers of all types is essentially always less than in a private-pay situation.  So you are already getting a significant discount over what you would have paid, had you been forced to spend your own funds.

Second, when Medicaid makes a reimbursement claim, the amount requested is almost always negotiable.  That’s another reason that having an Elder Law attorney involved can be helpful.  Our firm is accustomed to negotiating with Medicaid on this type of matter, so we frequently succeed in reducing the bill by a material amount.

Needless to say, in negotiations with a government agency, you are better off having them handled by experienced Elder Law legal professionals than going at it alone.

The uncertainty that comes with Spousal Refusal should in no way discourage you from investigating and using this strategy.  Discussing the pros and cons with an Elder Law attorney will help you to quantify and clarify the potential benefits and drawbacks.  This will help give you confidence that you are making the decision that is best in your particular circumstances.

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