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Asset Protection When Your Spouse Goes on Medicaid

How Federal Guideline Prevent Spousal Impoverishment

Man in nursing home

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Medicaid Spousal Impoverishment

In order to be eligible for Medicaid benefits a nursing home resident may have no more than $2,000 in assets (an amount may be somewhat higher in some states). In general, the community spouse may keep one-half of the couple's total "countable" assets up to a maximum of $123,600.

Most seniors cannot afford nursing home care, not on their own. The average monthly cost for a shared room is $6,692 per month or $80,304 per year. For a private room, it is even higher at $7,604 per month. That's a whopping $91,248 per year!

Under the Medicaid spousal impoverishment provisions, a certain amount of the couple's combined resources is protected for the spouse living in the community. Depending on how much of his or her own income the community spouse actually has, a certain amount of income belonging to the spouse in the institution can also be set aside for the community spouse's use.

Since Medicare does not cover long-term nursing home care and few people can afford long-term care insurance, that leaves many Americans to turn to Medicaid. Eligibility for Medicaid, at least when it comes to nursing facility care or long-term home care, is based on your assets as a couple.

This is where Medicaid planning becomes essential. How can you have few enough assets for your spouse to qualify but still have enough resources for you to live in the community?

Depending on how much of his or her own income the community spouse actually has, a certain amount of income belonging to the spouse in the institution can also be set aside for the community spouse's use.

Following is the minimum and maximum amount of resources and income that can be protected for a spouse in the community in 2018.

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Post-Eligibility Treatment of Income

The post eligibility calculation is made to determine how much an individual in an institution (usually a nursing home) is able to contribute to cost of his/her own care. It applies only to individuals who are institutionalized (most commonly to those in nursing facilities) and to certain individuals receiving home and community-based waiver services. The process only applies to those with income and only after their Medicaid eligibility has been established.

The contribution is determined by first calculating the individual's total income and then deducting certain amounts from that income. Specifically, the individual's contribution is his or her total income less the following deductions (often referred to as "protected amounts"):

  • A personal needs allowance of at least $30;
  • If there is a community spouse and the spousal impoverishment rules discussed above apply, a community spouse's monthly income allowance (at least $1,939 but not exceeding $2,931 for 2014), as long as the income is actually made available to the community spouse;
  • A family monthly income allowance, if there are other family members living in the household;
  • An amount for medical expenses incurred by the spouse who is in the medical facility.

Once the above items are deducted from the institutionalized individual's income, any remaining income is contributed toward the cost of his or her care in the institution.

Source: www.medicaid.gov


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Disclaimer: Elder Options of Texas is not rendering any legal or professional advice.  If legal advice is necessary the reader should consult a competent attorney.

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