Long-term care costs in a skilled nursing facility can easily run $100,000 a year. Even those with significant assets, especially in a married couple’s situation, assets can quickly be wiped out. Today’s blog deals with the question for married couples, “Does spousal impoverishment protect against Medicaid recovery”? It is Beck & Lenox’s experience that the government has no interest in collecting all of a married couple’s income and assets to pay for one spouse’s stay in a skilled nursing facility while risking the impoverishment of the spouse trying to maintain the family home.
KMAland’s recent article entitled “’Spousal Impoverishment’ Preserves Assets from Medicaid Recovery” explains that states must “recover” funds Medicaid spends on in-home or out-of-home nursing care for those 55 and older. However, the Spousal Impoverishment program lets the healthy spouse save some of their assets, such as their house, if the spouse continues to live there.
If one spouse needs nursing home care, they should request a “Spousal Impoverishment” assessment through the Department of Health and Human Services. This entails dividing their total assets in half.
They look at half of the assets that go to the spouse, who will be considered the one needing the nursing care. So, for example, that person needs to spend their assets down to $4,000 in Nebraska to qualify for Medicaid. For Missouri, it is $5,301.85.
The family home isn’t considered when totaling the couple’s assets. However, once the spouse needing care qualifies for Medicaid, the house should be transferred to the name of the spouse still living there. That individual is called the “community spouse.”
If this is not done, and the community spouse dies first, the house becomes eligible for Medicaid recovery. However, again, that’s because it’s considered an asset of the spouse receiving Medicaid.
The “community spouse” can keep a maximum of roughly $137,000 (Missouri is $148,620) and a minimum of approximately $27,000 (Missouri is $29,724). There is a formula in most states as to how much income the community spouse may be able to keep to pay for housing and utility expenses. In Missouri, the minimum allowance is $2,289 per month, and the maximum is $3,716.
Note that assets given away within five years of applying for Medicaid, the “look-back” period in most states, will be considered when determining total assets. This won’t permanently disqualify a person from Medicaid but will result in a “penalty period.”
States’ Spousal Impoverishment Program and Medicaid Recovery both include several exceptions and special considerations. Seniors should speak to an experienced elder law attorney and not delay seeking a Spousal Impoverishment assessment if they anticipate needing Medicaid.
Beck & Lenox has been dealing with Medicaid planning for over 20 years in the state of Missouri. We are your source for nursing home Medicaid, whether planning for future needs or experiencing an immediate crisis situation. An initial discovery call with one of our attorneys can be scheduled free of charge by clicking here.
Reference: KMAland (March 19, 2023) “’Spousal Impoverishment’ Preserves Assets from Medicaid Recovery”