One in three people who turn 65 end up in a nursing home. No one ever wants to go there, yet most of the time the family has no choice about this issue (it becomes dangerous to keep the person at home, the daily care required is too much for a home care aide, etc). 

In New York and in New Jersey nursing home now costs $15-$20K a month! The vast majority of people cannot pay this bill on their own, especially after years of retirement spending. Even if the person wants to stay at home, an average home care bill is $10-$12K a month, which, for most people is also unaffordable based on Social Security pensions and retirement savings.

Currently, Medicaid pays for home care and nursing home care.  If the proposed health care bill passes, Medicaid spending on the elderly will be cut by approximately 25%. It is unclear how seniors will be able to cover their health care needs without government help.  Most, of course, are likely to forego the necessary care, which will result in increased hospitalizations. 

To qualify for Medicaid after 65, you must be poor. Poor in New York means having assets of less than $14,850 ($21,850 if married). There are also income restrictions. Of course, elder law attorneys help clients qualify for Medicaid by setting up trusts, transferring assets, and advising on various options. These methods become a necessity when assets must be preserved for a well-spouse, or for additional care for the senior that Medicaid does not provide. There are also complicated rules on penalties on transfers, exceptions to penalties and income shifting in families.

These rules are complicated, not easily found and ever changing. With looming cuts to Medicaid, the rules are likely to become even more onerous. Talk to a qualified attorney who will be able to guide you and advise you on best options for your loved ones.

Disclaimer: This article only offers general information.  Each situation is unique. It is always helpful to talk to a specialized attorney, to figure out your various options and ramifications of actions.  As every case has subtle differences, please do not use this article for legal advice. Only a signed engagement letter will create an attorney-client relationship.