The Medicaid rules are designed to maintain a minimum standard of living for both spouses.
When a Medicaid applicant is married, the rules allow their spouse to retain a minimum amount of assets and income. This is in order to prevent spousal impoverishment for the community spouse. The community spouse needs to be able to have sufficient means to live off of. We’ve also already talked about the community spouse resource allowance (CSRA), and there is also a minimum income level for the community spouse. This is called the minimum monthly maintenance needs allowance (or MMMNA).
In Iowa, the 2019-2020 MMMNA is a range. The minumum amount is $2,113.75 / month, and the maximum amount is $3,216* / month. This amount is reevaluated every year.
The reasoning behind having a range for the MMMNA is that the non-applicant’s “shelter” costs are taken into account. “Shelter” costs include expenses such as rent, mortgage, property taxes, homeowners insurance, and utilities. In 2019-2020, the shelter allowance is $634.13 / month. If the costs are greater than the set monthly shelter allowance, the MMMNA will be increased accordingly until the total needs allowance reaches $3,216 / month.
Let’s look at an example:
John and Jane live in Iowa, and John needs to go to a Medicaid funded nursing home. John’s income is $2,600 / month and Jane’s income is $700 / month. Because Jane’s income is under Iowa’s MMMNA of $2113.75, she is automatically entitled to $1,413.75 / month of John’s income. Other costs that are needed to be taken into account are: utilities($361 / month), mortgage and real estate tax payments($1,425 / month), and homeowners insurance($100 / month). All these other costs put together equals $1,885 / month. Because Jane’s shelter costs are above the Community Spouse Monthly Housing Allowance of $634.13, an additional $1,251.87 is entitled to her in shelter costs.
Jane is entitled to $1,413.75 / month in income and $1,251.87 / month in excess shelter costs, bringing her entitled total up to $2,665.62 / month. However, when we add in her own income of $700 / month, her total income is $3,365.62 / month, which is above the maximum monthly maintenance needs allowance of $3,216. This means she would receive $ 149.62 / month in less income from her husband in order to reach the maximum monthly maintenance needs allowance.
Sounds confusing, right?
That’s why you need a professional to help you navigate the ins and outs of Medicaid planning. Consult a Medicaid Attorney to make sure all the rules work for you.
*This is the 2019-2020 MMMNA amount.