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Any way you look at it, long term care services are expensive. And when you have a married couple with one spouse residing in the nursing home while the other spouse is healthy enough to reside in their residence, it gets tough because on top of the several thousand dollar nursing home bill, the couple is also spending thousands monthly to maintain the residence. In these circumstances, couples spend hundreds of thousands of dollars over several years.

Many couples, particularly those who do not plan ahead, are forced to consume their assets (also called “Countable Resources”). This post is not about spending or protecting the assets, but this post is about how the monthly income of the couple gets handled.

Here’s an example. Let’s say that each spouse is receiving $2,000 of monthly income (social security and pensions are common forms of monthly income, but there are others).

Long Term Care Medicaid rules provide that ownership of income is determined without regard to community property laws. For Medicaid purposes, a spouse has full ownership of income paid in his name.

In determining how much of the income the couple can keep. Medicaid rules provide that the income of the community spouse is never to be considered in determining eligibility for an institutionalized spouse. Keep in mind that the spouse residing in the nursing home institution is called the “institutionalized spouse,” while the spouse still living in the community is called the “community spouse.” The community spouse always gets to keep all of the community spouse’s income.

In order to determine the institutionalized spouse’s patient liability, we must start with that spouse’s gross monthly income ($2,000 in our example) and subtract their personal needs allowance ($38). Then, we subtract the Community Spouse’s Maintenance Needs Allowance.

The Community Spouse’s Maintenance Needs Allowance is calculated by subtracting the community spouse’s income ($2,000) from the Community Spouse’s Maintenance Needs Standard ($3,160.50 for the first half of 2019 – it gets adjusted twice each year). Thus the Community Spouse’s Maintenance Needs Allowance totals $1,160.50.

So, $2,000 minus $38 minus $1,160.50 equals $801.50. This is the institutionalized spouse’s patient liability. The concept here is that the community spouse always gets to keep all of the community spouse’s income. But if the community spouse’s income is less than the applicable Maintenance Needs Standard, then the community spouse gets to keep enough of the institutionalized spouse’s income to get the community spouse up to a total of monthly income that equals the Maintenance Needs Standard.

Keep in mind here that these are rules and your state’s rules may differ. Also note that this calculation is not made, nor is it relevant, if the patient is denied Medicaid due to too many countable resources or for some other disqualifying reason.

This post is for informational purposes only and does not provide legal advice. Please do not act or refrain from acting based on anything you read on this site. Using this site or communicating with Rabalais Estate Planning, LLC, through this site does not form an attorney/client relationship.

Paul Rabalais
Estate Planning Attorney
www.RabalaisEstatePlanning.com
Phone: (225) 329-2450…(read more)

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Medicaid Income Rules When One Spouse is in the Nursing Home

When a loved one needs long-term care and is admitted to a nursing home, it can cause significant financial strain on the family. Medicaid, a joint federal and state program, provides health coverage for individuals with limited income and assets. However, the income rules change when one spouse is in a nursing home and the other remains at home.

In general, Medicaid eligibility is determined based on income and assets. To qualify for Medicaid, an individual’s income must be below a certain threshold. However, when one spouse requires nursing home care, the income rules differ to protect the financial well-being of the spouse remaining at home, often referred to as the “community spouse.”

When assessing Medicaid eligibility for a couple with one spouse in a nursing home, the state determines a monthly income allowance for the community spouse. This determination is made to ensure that the spouse at home has enough income to meet their needs and maintain a certain standard of living.

The community spouse income allowance (CSRA) is based on various factors, such as the cost of living in the area and the actual income of the community spouse. The CSRA can range from a minimum of $2,177.50 to a maximum of one hundred and thirty percent (130%) of the Federal Poverty Level (FPL) for a household of two in the relevant state. Medicaid publishes the FPL amounts annually.

To calculate the CSRA, the state first determines the nursing home spouse’s income. This includes all income sources such as any Social Security benefits, pensions, retirement accounts, or annuities. The nursing home spouse can retain a small personal needs allowance to cover certain expenses, while the remaining income is typically required to be paid towards the cost of care.

Next, the state calculates the community spouse’s income. If their income is below the CSRA, the community spouse is allowed to receive an income allowance from the nursing home spouse’s income up to the CSRA. This amount is typically the difference between the CSRA and the actual income of the community spouse.

For example, if the CSRA is determined to be $4,000 per month and the community spouse has an income of $2,000 per month, the nursing home spouse’s income, in this case, would contribute the remaining $2,000 to meet the CSRA. This ensures that the community spouse has a minimum monthly income of $4,000.

It is crucial to note that the CSRA is not an automatic entitlement. The community spouse may need to go through a process known as a spousal impoverishment calculation to ensure they are receiving the appropriate income allowance. This calculation considers both the income and the assets of the couple and varies by state.

In addition to the CSRA, the community spouse is also entitled to retain a share of the couple’s assets known as the Community Spouse Resource Allowance (CSRA). This amount can range from $26,076 to $130,380 depending on the state.

Navigating the Medicaid income rules when one spouse is in a nursing home can be complex and overwhelming. Professional assistance from a Medicaid planning professional or an elder law attorney experienced in Medicaid can help families understand the rules specific to their situation and ensure that the wellbeing of the community spouse is protected.

In conclusion, Medicaid provides coverage for individuals with limited income and assets; however, income rules change when one spouse is in a nursing home and the other remains at home. The community spouse is entitled to a monthly income allowance, known as CSRA, to ensure they have enough income to meet their needs. Navigating these rules can be challenging, so seeking expert advice is essential to protect the financial well-being of the community spouse.