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How to Plan for Spouse’s Medicaid

Asset Protection Strategies for Medicaid Eligibility
When a spouse enters a nursing home, the cost of care can be financially devastating. Many families are simply unable to afford long-term care without applying for Medicaid.

When a spouse enters a nursing home, the cost of care can be financially devastating. Many families are simply unable to afford long-term care without applying for Medicaid. To qualify for Medicaid, there are limits on the resources that an applicant may have. Resources include both income and assets according to Beck, Lenox & Stolzer Estate Planning and Elder Law, LLC, LLC, an elder law firm that has successfully submitted over 3,000 Medicaid applications in the state of Missouri. Knowing how to plan for spouse’s Medicaid is the key to navigating this very complicated journey.

The Times Herald’s recent article entitled “Medicaid planning for a spouse” says that one of the toughest requirements for Medicaid to understand and get around is the financial eligibility. These rules for the cost of long-term care are tricky, especially when the Medicaid applicant is married.

Please note:  The Times Herald’s article makes reference to financial figures applicable to the state of Pennsylvania.  Federal Medicaid laws allow states to be more generous with certain allowances than what the Federal law provides.  The concepts are the same, but because Beck, Lenox & Stolzer’s client base is in Missouri, we are showing Missouri’s financial figures here.  

To be eligible for Medicaid for long-term care in a nursing home, an applicant cannot have more than $5,000 in countable assets (2021 income limit).

However, federal law says that certain protections are designed to prevent a spouse from becoming impoverished when their spouse goes into a nursing home and applies for Medicaid. In 2021, the spouse of a Medicaid recipient living in a nursing home—known as “the community spouse”—can keep up to $130,380 (which is the maximum Community Spouse Resource Allowance “CSRA”) and a minimum of $26,076 (the minimum CSRA) without placing the Medicaid eligibility of the spouse who is receiving long-term care in jeopardy.

The calculation to determine the amount of the CSRA, the countable assets of both the community spouse and the spouse in the nursing home, are totaled on the date as of the first month of a continuous 30 day institutionalization in a nursing home or hospital, with subsequent direct transfer to a nursing home.  We call this the “snapshot” date.The community spouse is entitled to retain 50% of the couple’s total countable assets up to a max OR at least the minimum if 50% is less than the minimum.  The rest must be “spent-down” to qualify for the program.

In addition to the CSRA, there are also federal rules concerning income for the spouse. In many states, the community spouse can keep all of his or her own income no matter how much it is. If the community spouse’s income is less than the amount set by the state as the minimum needed to live on (“the Minimum Monthly Maintenance Needs Allowance” or “MMMNA”), then some of the applicant spouse’s income can also be allocated to the community spouse to make up the difference (called “the Spousal Allowance”).

Medicaid rules are very complex, and qualifying a spouse for it is not recommended as a DIY project.  It is in a family’s best interest to speak with an experienced elder law attorney on how to plan for spouse’s Medicaid.  Beck, Lenox & Stolzer attorneys are happy to assist in that planning.

Reference: The Times Herald (Jan. 8, 2021) “Medicaid planning for a spouse”


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