How to: Plan for Spouse’s Medicaid

Orange City Iowa Estate Planning

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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.

Medicaid eligibility is based on income. This means that there are restrictions on the resources—both income and assets—that you can have when you apply.

[Continue reading about which resources are counted here]

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

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 of the nursing home admission. That is known as the “snapshot” date. The community spouse is entitled to retain 50% of the couple’s total countable assets up to a max. 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”). These rules are pretty complex, so speak with an experienced elder law attorney to find out how they apply to your situation.

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

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