The Centers for Medicare and Medicaid Services (CMS) has eliminated the requirement to apply for other benefits as a condition of Medicaid eligibility under 42 CFR § 435.608. Under this requirement, Medicaid applicants and recipients have been required, as a condition of their eligibility, to take all necessary actions to obtain other benefits to which they are entitled. Such benefits include, annuities, pensions, retirement and disability benefits such as Veterans’ compensation and pensions, Social Security Retirement, Survivors, and Disability Insurance, Railroad Retirement benefits and unemployment benefits. As a result of CMS’s rulemaking, 18 NYCRR § 360-2.3(c)(1) no longer requires Medicaid applicants and recipients to apply for other entitlement benefits that may be available to them, as a condition of Medicaid eligibility, effective December 23, 2025.
However, the requirement to apply for Medicare as a condition of Medicaid eligibility has not changed and remains current policy. Additionally, this change under the federal final rule does not apply to the requirement to apply for available Third-Party Health Insurance or to Medicaid payment of cost-effective health insurance premiums. Effective December 23, 2025 the requirement for Medicaid applicants and recipients to apply for or maximize the following benefits as a condition of Medicaid eligibility may no longer be cited as a reason for denial or discontinuance of Medicaid:
- Social Security Benefits (Social Security Retirement, Survivors and Disability Insurance – RSDI) An applicant/recipient (A/R) who is eligible for or reasonably appears to meet the eligibility criteria for RSDI entitlement benefits is no longer required to apply for such benefits as a condition of Medicaid eligibility.
- Unemployment Insurance Benefits (UIB) are benefits to offset the loss of earned income for certain workers who have lost their jobs through no fault of their own. The requirement for A/Rs to apply for UIB as a condition of Medicaid eligibility is eliminated.
- Veterans’ Benefits are cash benefits to which retired or disabled veterans (and/or their dependents) may be entitled. The requirement for a Medicaid A/R to apply for veterans’ benefits to which they may be entitled as a condition of Medicaid eligibility is eliminated.
- Maximum Periodic Payments from Retirement Funds. Retirement funds are annuities or work-related plans for providing income when employment ends (e.g., pension, disability or other retirement plans administered by an employer or union). Other examples are funds held in an individual retirement account (IRA) and plans for self-employed individuals, sometimes referred to as Keogh plans. The policy that requires a Medicaid A/R who is eligible to receive periodic payments from a retirement fund to apply for the maximum periodic payment available as a condition of Medicaid eligibility is rescinded. Additionally, a consumer cannot be required to receive or maximize periodic payments for purposes of calculating a net available monthly income (NAMI) contribution under post-eligibility rules, and failure to receive maximized payments is not subject to treatment as an uncompensated transfer for consumers seeking coverage of nursing home care. Treatment of retirement funds under Medicaid income or resource counting rules must be determined based on whether the retirement fund is in payout status. A retirement fund is in payout status when the individual is receiving regularly scheduled periodic payments. A retirement fund that is in payout status is subject to income counting rules, regardless of the periodic payment amount. The payments are counted as monthly unearned income, regardless of the actual frequency of the payments, and the principal balance of the retirement fund is not a countable resource. If the retirement fund is not in payout status, the balance of the account is a countable resource. The countable resource value is the amount that the consumer can currently withdraw. If there is a penalty for early withdrawal, the value of the resource is the amount available after the penalty deduction. Any ordinary income taxes due are not deductible in determining the resource value. If a consumer reports a change to the periodic payment amount or the payout status, districts must recalculate income based on the reported change or change treatment of the retirement fund as a countable resource to countable income, or from treatment as countable income to a countable resource, as applicable. The change is effective the month in which the change occurred. For example, in November, a change is reported that results in a retirement fund that is being treated as a resource being treated as income because the consumer elected to begin receiving periodic payments in December. Beginning December, the periodic payment is countable income, and the balance of the retirement fund is no longer a countable resource. If the change is reported after the change has occurred, districts may need to redetermine eligibility retroactively. If such change is subject to the elimination of the condition of eligibility requirement to pursue the maximum periodic payment, the retroactive redetermination is limited to changes that occurred on or after June 4, 2025.
- U.S. Savings Bonds are a U.S. Treasury security that increases in value until it is cashed or reaches final maturity. When an A/R owns a U.S. Savings Bond, the bond must be evaluated to determine its availability and value based on the bond’s minimum retention period. The policy requiring individuals to request to have the minimum retention period waived as a condition of eligibility for Medicaid, is rescinded.
- Elective Share Interest For couples that are not subject to a transfer of assets review, the requirement for a surviving spouse, as a condition of Medicaid eligibility, to exercise their right of election against their deceased spouse’s estate under Section 5-1.1-A of the New York State Estates, Powers and Trusts Law (EPTL), is eliminated.
Call or text the experienced New York Elder Law Attorneys at Friedman & Ranzenhofer, PC at 716.543.3764 for a free Medicaid planning consultation.