spouse

Medicaid protects the spouses of nursing home residents to make sure they have at least the minimum support they need to continue living in the community.

Protection of Marital Assets:

To determine the minimum support amount that a spouse can keep, Medicaid adds the total value of all “countable” assets owned by the spouse and the nursing home resident as of the date of "institutionalization," (the day on which the resident either enters a long-term care facility or enters a hospital in which he or she then stays for at least 30 days). The spouse is usually permitted to keep one half of the couple’s total “countable” assets. The amount that the spouse can keep is called the “community spouse resource allowance” (CSRA). In addition to the CSRA, nursing home residents are always allowed to keep another $2,000 as a personal resource “reserve.” Any excess assets beyond the amount that the spouse can keep as a CSRA and the amount that the resident can keep as reserve must be spent before Medicaid will provide benefits. The process of reducing marital assets down to the CSRA and reserve amount is called the “Medicaid spend down."

Example: Ricky and Lucy have $80,000 in “countable” assets on the day Ricky enters a nursing home. Lucy is permitted to keep $40,000 as her CSRA ($80,000 divided in half). Ricky is permitted to keep another $2,000 as his “reserve.” Added together, Ricky and Lucy can keep a total of $42,000. Therefore, Ricky will be eligible for Medicaid once the couple reduces their assets to a combined total of $42,000 by spending $38,000 ($80,000 – $40,000 for Lucy – $2,000 for Ricky = $38,000 that must be spent down).

Although spouses are usually entitled to one half of the total countable assets, Medicaid imposes a cap or ceiling on the CSRA amount that a spouse can keep. This is in keeping with Medicaid's primary role, which is providing health coverage to people with limited financial means. The maximum amount spouses may keep is currently $92,760.

Example: Ricky and Lucy have $200,000 in “countable” assets on the day Ricky enters a nursing home. Since Lucy is permitted to keep a maximum of $92,760 as her CSRA, she will not be allowed to keep one half of the total assets. However, Ricky is still permitted to keep another $2,000 as his reserve. Added together, Ricky and Lucy can keep a total of $94,760. Therefore, Ricky will be eligible for Medicaid once the couple reduces their assets to a combined total of $94,760 by spending $105,240 ($200,000 – $92,760 for Lucy – $2,000 for Ricky = $105,240 that must be spent down).

In addition to a ceiling, Medicaid imposes a floor on the CSRA. The current minimum allowance for the spouse is $18,552, meaning that couples with very few assets may be able to protect more than one half of the total “countable” assets. Again, one of the goals of the Medicaid program is to prevent impoverishing the community spouse.

Example: Suppose Ricky and Lucy own $25,000 in “countable” assets on the day Ricky enters a nursing home. Lucy is permitted to keep a minimum of $18,552 as her CSRA, meaning she will keep more than one half of the assets. Again, Ricky is permitted to keep an additional $2,000 as his reserve. Added together, Ricky and Lucy can keep a total of $20,552. Therefore, Ricky will be eligible for Medicaid once the couple reduces their assets to a combined total of $20,552 by spending $4,448 ($25,000 – $18,552 for Lucy – $2,000 for Ricky = $4,448 that must be spent down).

Protection of Income:

Medicaid does not disrupt the spouse’s monthly income. Medicaid never requires the spouse to use his or her income to support the nursing home resident receiving Medicaid benefits. However, the nursing home resident’s income generally must be used to pay the cost of the care facility. The portion of the cost paid by the nursing home resident is called the “Patient’s Monthly Liability” (PML). The PML depends on the resident’s income and the amount of his or her expenses. In cases where most of the couple's income comes from the nursing home resident and paying the full PML would cause the community spouse to be unable to cover his or her own needs, a monthly allowance for the community spouse is available. In such cases, Medicaid reduces the resident’s PML in order for the community spouse to keep some, or perhaps all, of the resident’s income.

Medicaid determines how much to give the spouse by calculating a “Minimum Monthly Maintenance Needs Allowance” (MMMNA), using a complicated formula based on the spouse’s housing costs. The MMMNA ranges from a low of $1,515.00 to a high of $2,319. If the spouse's own monthly income is less than the MMMNA (the amount Medicaid feels the spouse needs), then the shortfall is made up from the nursing home resident's income.

Example: Ricky and Lucy’s total monthly income is $2,000 month; $1,500 comes from Ricky and $500 is from Lucy. Ricky enters a nursing home and applies for Medicaid. The Department of Social Services decides that Lucy’s MMMNA is $1,515, based on her housing costs. Since Lucy’s monthly income of $500 is less than the MMMNA, she is entitled to keep $1,015 of Ricky’s income. Ricky is permitted to keep another $30 for personal needs. Thus, his PML will be $455 ($1,500 – $1,015 to Lucy = $485 and $485 – $30 personal fund = $455).

Summary:

Medicaid provides important financial protections for married couples. Spouses can keep a portion of the couple’s “countable” assets and may also be able to keep some of the resident’s income, if the spouse’s own income is too small to meet living expenses. An elder law attorney can recommend ways to effectively maximize these spousal protections.

For more information, call your local Department of Social Services or contact:

Attorney V. Tate Davis**

Member, National Academy of Elder Law Attorneys (NAELA): An association of attorneys who are dedicated to improving the quality of legal services provided to the elderly. Some of the issues that NAELA members assist their clients with include, but are not limited to: public benefits (i.e. Medicaid), probate and estate planning, guardianship, and health and long-term care planning. ◙

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