Medicaid Spousal Refusal | Speak to a Medicaid Refusal Attorney in New York

Protect Your Financial Future

When one spouse needs long-term care, the financial impact on the other can be overwhelming. In New York, spousal refusal is a legal strategy that may help protect the healthier spouse’s assets and income while still qualifying the other spouse for Medicaid benefits. Although this is not widely understood outside of elder law circles, it can offer meaningful financial relief, especially when used as part of a broader Medicaid planning strategy.

Early planning can help families avoid unnecessary delays, protect more assets and navigate potential complications with less stress. This valuable tool, with an attorney to support you through the process, gives you the best chance to secure the care a loved one needs while protecting the financial future of the spouse who stays at home.

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What Is Spousal Refusal?

Spousal refusal is a legal strategy that lets one spouse legally decline financial responsibility for the other spouse’s long-term care costs, most commonly when that care is covered by Medicaid. Families often use this strategy to protect their assets while ensuring that a spouse in need can get the care they require.

When one spouse needs long-term care, such as nursing home care, they can apply for Medicaid. While Medicaid normally considers both spouses’ income and assets when determining eligibility, under New York law, the “community spouse” who remains at home has the right to refuse to contribute to these care costs. Generally, they may keep $3,948 per month of the couple’s income and an additional $157,920 in assets or resources. Other exempt assets, such as a home and one automobile, are excluded. The spouse being cared for in a facility is known as the “institutionalized spouse.”

Many spouses cannot afford to live on Medicaid allowances. However, certain income and assets are exempt from Medicaid if there is a spouse. Spousal refusal is often considered when:

One spouse enters a nursing home, and the other wants to stay in the family home.
The couple wants to preserve savings to support the healthy spouse’s living expenses.
The couple wants to avoid selling or spending down assets.

For example, if one spouse moves into a care facility and the other stays home with limited income, spousal refusal can help them retain their joint savings for living expenses without jeopardizing the other spouse’s Medicaid eligibility.

Spousal refusal is a legally valid Medicaid planning option in New York. However, it is important to understand that the state may pursue a claim against the refusing spouse to recover the cost of care. Although Medicaid may cover the institutionalized spouse’s care once they establish eligibility, the local social services department has the right to seek contribution or reimbursement from the community spouse.

Spousal refusal is an excellent option for spouses who find one of them on the nursing home doorstep. Far better, however, is to plan ahead with long-term care insurance or, where such insurance is not available for medical or financial reasons, consider setting up a Medicaid Asset Protection Trust (MAPT) at least five years ahead of time to protect your home and life savings.

Process Overview

The process starts by shifting excess assets into the name of the community spouse. They then sign a “Refusal to Support” letter, which the attorney prepares and files with the Department of Social Services (DSS), indicating that they refuse to contribute their income and assets to the care of the ill spouse since they need that income and assets for their own care and well-being. Note that you may not refuse your spouse’s own monthly income over the exempt amount, as it is not coming to you.

Once the community spouse invokes their right to refuse and meets all the other requirements of the Medicaid application, the state Medicaid program pays for the institutionalized spouse’s care. After Medicaid is granted, DSS may institute a lawsuit seeking to recover the cost of care from the refusing spouse. However, there are still reasons why spousal refusal makes sense:

First, DSS hardly ever invokes this right.
Secondly, these lawsuits often settle for less than the cost of care.
Thirdly, the county payment can be deferred until the community spouse dies.
Finally, recovery is only for the Medicaid reimbursement rate.

For example, if the private pay rate is $20,000 a month, Medicaid often has to pay much less. The Medicaid rate at the same facility may be only $14,000 per month. The county may only pursue you for the amount they actually paid. So even if you had to repay the county, you would still be saving $6,000 per month for the cost of your spouse’s care.

Legal Requirements and Documentation

You need a few legal documents and must meet certain requirements to show eligibility and intent for spousal refusal. Key legal requirements include:

Marriage must be legally valid: The individuals must be legally married for Medicaid spousal refusal.
One spouse must be applying for Medicaid long-term care. Long-term care can be nursing home care or, in some cases, home- or community-based services through a waiver program.
Community spouse refused to contribute: The community spouse must formally declare that they are unwilling to use their income or assets to pay for the institutionalized spouse’s care.

In addition to the spousal refusal letter, you’ll need the Medicaid application, resource and income documentation for both spouses, proof of legal residency and citizenship, and, if applicable, power of attorney papers. DDS offices may ask for clarification or more information.

Pros and Cons of Spousal Refusal

By refusing to contribute to the cost of care, the institutionalized spouse may qualify for Medicaid coverage sooner, even if the couple’s combined resources exceed Medicaid’s standard limits. Additionally, for couples with more complex financial situations, like blended families, business assets or multiple properties, spousal refusal can be integrated into broader planning strategies, often alongside trusts and gifting.

Even when a spouse refuses to contribute, Medicaid requires a detailed accounting of both spouses’ income and assets. This can feel invasive and burdensome, especially for those with complex finances. Spousal refusal implementation can also vary. New York counties interpret and enforce spousal refusal differently. Some may be more aggressive in pursuing claims than others, which adds a layer of unpredictability.

Frequently Asked Questions

It is important to have clarity when you take on spousal refusal. Misconceptions can lead to confusion, missed opportunities or even unintended legal consequences. Here are some of the frequently asked questions we encounter:

Spousal refusal does not automatically shield all income and assets from Medicaid scrutiny. Both spouses must still fully disclose their financial information, and if the state chooses to pursue recovery, assets in the community spouse’s name are subject to claim, even if Medicaid benefits were granted.

New York’s Medicaid estate recovery rules still apply. After the death of a Medicaid recipient, the state may attempt to recover costs from the estate, even if spousal refusal was used during their lifetime. Without proper planning, including using trusts, assets may still be at risk.

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At Ettinger Law Firm, we focus exclusively on elder law and estate planning. With over 35 years of experience, we realize how important lifetime partnerships are. That is why we have a trademarked process:

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Get Support With Ettinger Law Firm

While spousal refusal is legal in New York, it’s a complex strategy that works best with the guidance of an experienced attorney. Each family’s situation is unique, and what works for one may not work for another. Transparency, documentation and legal support are essential for families considering spousal refusal. It is not a one-size-fits-all solution, but can be a valuable piece of a broader Medicaid planning strategy for some.

As one of New York’s largest and oldest elder law and estate planning firms, Ettinger Law Firm understands how complex and emotional these life issues can be. We use a low-key approach that lets you take your time and consider all the alternatives, whether you are looking into spousal refusal, wealth preservation strategies or estate preservation.

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At Ettinger Law Firm, our elder law lawyers focus on the needs of older adults in New York when protecting their families, assets and future. We recognize that many of our clients have minimal or no experience working with attorneys — our low-pressure approach enables you to make these crucial life decisions at your own pace. Trust our team to educate you and make the information you need accessible throughout the process.