How Spousal Refusal Protects the Healthy Spouse Under New York Medicaid

When one spouse needs nursing home care or long-term home care, the other spouse is often concerned about what will happen to the savings the couple built together. New York law offers a more protective option known as spousal refusal, which allows the healthy spouse to keep his or her own assets and income out of the Medicaid eligibility calculation. Below, I explain how the process works and what obligations remain once the refusal is filed.

How Medicaid Treats a Married Couple

For Medicaid purposes, the spouse who needs care is called the institutionalized spouse, and the spouse who remains at home is called the community spouse. Medicaid generally treats both spouses' assets as available to the applicant, regardless of title. For 2026, the applicant spouse may keep $33,038 in countable resources. The community spouse is permitted to keep the greater of $74,820 or one-half of the couple's combined countable resources, up to a maximum of $162,660, and is entitled to a minimum monthly income allowance of $4,066.50. Anything above those figures is expected to be spent on the ill spouse's care before Medicaid will pay. Where the community spouse's own income exceeds the allowance, the agency may also ask for a contribution of 25 percent of the excess each month. For many couples, these limits may not leave the healthy spouse enough to live on comfortably.

What Spousal Refusal Does

Under Social Services Law § 366(3)(a), the community spouse may sign a written statement refusing to make his or her income and resources available for the care of the ill spouse. Once that statement is submitted with the Medicaid application, which in New York City is filed through the Human Resources Administration, the applicant's eligibility is determined based only on the applicant's own income and assets. The applicant then qualifies as long as his or her own resources are at or below the $33,038 limit. The refusal must still be accompanied by full financial disclosure. The law allows a spouse to refuse to contribute, but it does not allow a spouse to refuse to provide information, and an application without the community spouse's financial documentation will be denied. That is why I advise clients to gather complete statements for both spouses before the refusal is signed.

Transferring Assets to the Healthy Spouse

Often, much of the couple's savings is held in the ill spouse's name or jointly. Transfers between spouses are exempt from Medicaid's five-year look-back rules, so assets can be retitled into the healthy spouse's sole name without triggering a penalty period. After the transfer, the healthy spouse signs the refusal, and the ill spouse is left with only what falls within the resource limit. The ill spouse's income is still counted, and as we discussed in a prior article on Medicaid planning, excess income can often be directed to a pooled supplemental needs trust so that it does not reduce coverage. I recommend handling the transfers and the refusal together.

The Right of Recovery

Spousal refusal carries an obligation every client should understand. When Medicaid pays for care after a refusal, the State or the City may later seek reimbursement from the refusing spouse. In New York City, those claims are handled by the Human Resources Administration's Claims and Collections Division, which lists the spouses of nursing home residents receiving Medicaid among the parties it collects from. Recovery is at the agency's option and is not pursued in every case. In my experience, when a claim is made, it can often be resolved through negotiation, and the outcome is generally more favorable than spending down the healthy spouse's savings at the outset.

Updating the Healthy Spouse's Estate Plan

The healthy spouse's own will also deserves review. If the healthy spouse dies first and leaves everything outright to the spouse receiving Medicaid, that inheritance can disqualify the ill spouse and become subject to recovery. Even a will that leaves the ill spouse nothing can create a problem, because New York gives a surviving spouse a right of election under EPTL 5-1.1-A, and Medicaid may require the surviving spouse to exercise that right. For that reason, I recommend that the healthy spouse's will leave any share for the ill spouse in a supplemental needs trust under EPTL 7-1.12, which provides for the ill spouse's comfort without affecting eligibility.

When I Recommend Spousal Refusal

Spousal refusal is most useful when the healthy spouse holds, or can receive, assets well above the $162,660 allowance, or has income that would otherwise be partially claimed toward the ill spouse's care. It is also helpful for couples who married later in life and want each spouse's savings to pass to his or her own children. For couples with limited assets, the standard allowances may already protect everything, and a refusal may not be needed. With the right preparation, the healthy spouse can continue living at home with financial security while the ill spouse receives the care he or she needs.

If your loved one requires long-term care which needs to be covered by Medicaid without depleting your own savings, contact us today at (347) 766-2685 for a free phone consultation.

Contributed by Roman Aminov, Esq, a Queens estate attorney in New York City.