If your spouse is in the nursing home, you’ve got a lot on your mind. You want to find the right nursing home and get good care there. And you’re worried about how to pay for this, and whether you’ll have money to live on after paying the nursing home every month.
Fortunately North Carolina Medicaid law includes special protection for the spouse of a Medicaid applicant. These rules (if you know about them) can allow you as the healthy spouse to make sure that your loved one gets needed care, while preserving nearly all of the assets and keeping all of your income. After your spouse qualifies for Medicaid, his or her income may need to pay for care but you might even be entitled to part of that income instead of the nursing home.
But don’t rely on the Medicaid Office to tell you how to apply these rules to your full advantage. Unfortunately, too many people don’t get the right help and they spend tens of thousands or even hundreds of thousands of dollars needlessly. It is sad when someone comes into my office and explains how their spouse has been in the nursing home for the past few years. Now there is only about $50,000 left from what was over over $200,000 and they ask, “Can I keep some of this to live on?” Yes, they can and if only they had gotten help earlier they could have preserved nearly all of that to avoid becoming impoverished. That is a big frustration for me when I hear it.
Medicaid’s rules allow the spouse at home to keep income and assets in order to continue to live in the community. In Medicaid, the spouse at home is called the “community spouse” and the spouse in the nursing home is the “institutionalized spouse.”
Protection for Assets: the Community Spouse Resource Allowance
There is a Community Spouse Resource Allowance to protect assets for the community spouse. It works this way for a married Medicaid applicant. Upon application the countable assets of the couple (both the community spouse and the institutionalized spouse) are totaled as of the “snapshot date.” This date is as of the end of the month immediately preceding the the beginning of the couple’s first “continuous period of institutionalization” or “CPI.” The CPI is the date on which either spouse entered either a hospital or a long-term care facility in which he or she then stays for at least 30 days.
Example of CPI and Snapshot Date: If Mary first entered the hospital for care on May 15, and then moved to the nursing home for rehabilitation, her CPI would include her days in the hospital stay plus her nursing home stay. Once the combined stay is at least 30 days, then her (and her husband’s) CPI is established. The Snapshot date would be April 30 (the end of the month prior to Mary entering the hospital at the beginning of her CPI. Even if Mary goes home and doesn’t apply for Medicaid until many years later, the couple’s CPI and their Snapshot Date has been set….for both of them.
Planning Tip: If you have had a nursing home stay that established your CPI, even if you’re not going to apply for Medicaid now, get help from an elder law attorney experienced with Medicaid applications. That’s because it is best to documenting your assets as of the snapshot date, in case it is needed later. That will save a lot of time and trouble later. Even it’s another 10 years until your spouse goes into a nursing home, Medicaid will still need to establish the assets owned as of the time 10 years earlier when the CPI was first established. Ouch!
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 $117,240 (in 2014). Called the “community spouse resource allowance,” this is the most that a state may allow a community spouse to retain without a hearing or a court order. The least that a state may allow a community spouse to retain is $23,448 (in 2014).
Example: If a couple has $100,000 in countable assets on the date the applicant enters a nursing home, he or she will be eligible for Medicaid once the couple’s assets have been reduced to a combined figure of $52,000 — $2,000 for the applicant and $50,000 for the community spouse.
Some states, however, are more generous toward the community spouse. In these states, the community spouse may keep up to $117,240 (in 2014), regardless of whether or not this represents half the couple’s assets. For example, if the couple had $100,000 in countable assets on the “snapshot” date, the community spouse could keep the entire amount, instead of being limited to half.
The income of the community spouse is not counted in determining the Medicaid applicant’s eligibility. Only income in the applicant’s name is counted. Thus, even if the community spouse is still working and earning, say, $5,000 a month, she will not have to contribute to the cost of caring for her spouse in a nursing home if he is covered by Medicaid. In some states, however, if the community spouse’s income exceeds certain levels, he or she does have to make a monetary contribution towards the cost of the institutionalized spouse’s care. The community spouse’s income is not considered in determining eligibility, but there is a subsequent contribution requirement.
But what if most of the couple’s income is in the name of the institutionalized spouse and the community spouse’s income is not enough to live on? In such cases, the community spouse is entitled to some or all of the monthly income of the institutionalized spouse. How much the community spouse is entitled to depends on what the Medicaid agency determines to be a minimum income level for the community spouse. This figure, known as the minimum monthly maintenance needs allowance or MMMNA, is calculated for each community spouse according to a complicated formula based on his or her housing costs. The MMMNA may range from a low of $1,938.75 to a high of $2,931 a month (in 2014). If the community spouse’s own income falls below his or her MMMNA, the shortfall is made up from the nursing home spouse’s income.
Example: Mr. and Mrs. Smith have a joint income of $3,000 a month, $1,700 of which is in Mr. Smith’s name and $700 is in Mrs. Smith’s name. Mr. Smith enters a nursing home and applies for Medicaid. The Medicaid agency determines that Mrs. Smith’s MMMNA is $2,000 (based on her housing costs). Since Mrs. Smith’s own income is only $700 a month, the Medicaid agency allocates $1,300 of Mr. Smith’s income to her support. Since Mr. Smith also may keep a $60-a-month personal needs allowance, his obligation to pay the nursing home is only $340 a month ($1,700 – $1,300 – $60 = $340).
In exceptional circumstances, community spouses may seek an increase in their MMMNAs either by appealing to the state Medicaid agency or by obtaining a court order of spousal support.
Last revised 12-16-2014