Protecting the Community Spouse
The Community Spouse (“CS”) is the non-institutionalized spouse of the individual who is institutionalized in a nursing home (i.e., the “Institutionalized Spouse” or “IS”) and who is seeking Medicaid eligibility to pay for long-term care. Unless the combined countable assets of the couple are less than $2,000 for the institutionalized spouse plus the minimum resource standard of $24,180 for the community spouse (for 2017), some significant financial data must evaluated to determine Medicaid eligibility for the institutionalized spouse, because both spouses’ countable assets are considered. As a general rule, the institutionalized individual is allowed to have $2,000, while the spouse of a married applicant is permitted to have at the time of application an amount equal to one-half of the total amount of the combined countable assets that the couple had on the “snapshot date” (the date of institutionalization) up to a maximum spousal resource allowance of $120,900. (This amount is called the Community Spouse Resource Allowance). In short, the minimum community spouse resource allowance is $24,180 and the maximum is no more than $120,900. These numbers are effective in 2017. Medicaid Manual § M1480.231.
Determination Date for Calculating Countable Resources for Purposes of Determining Maximum Spousal Resource Allowance (the “snapshot date”)
In order to calculate how many countable assets wife may have on the application date, a determination must be made of what the couple’s combined countable assets were on the institutionalization date (commonly referred to as the “snapshot date”.) This determination of the level of the couple's assets is made as of the first day of the month of continuous institutionalization of the institutionalized spouse (the “snapshot date”). It is advantageous for the couple to have as many countable assets as possible in their names on the snapshot date up to a total value of $241,800 ($120,900 x 2) so that the amount the community spouse is allowed to keep will be as high as possible. Medicaid Manual § M1480.000 B.2.
It should be noted that there is no penalty for transferring assets between spouses. Before applying for Medicaid, any necessary asset transfers should be made between spouses so that the institutionalized spouse has no more than $2,000 in his name and the community spouse has no more than the permitted spousal resource allowance in her name. Any other excess assets should have been properly disposed of by the time of application so that there will be financial eligibility on the date of application.
Illustration of the CRSA Rules
1. Combined Countable Assets in Excess of Twice the Maximum Allowance. Let's assume a hypothetical couple has the following assets: A house assessed at $200,000 (the wife resides in the home), one automobile worth $12,000, $100,000 in financial accounts in the husband's name, $100,000 in financial accounts in wife's name, and $50,000 in jointly-titled assets, for a total of $250,000 in countable assets. The husband resides in a nursing home. We are seeking Medicaid eligibility for the husband.
Husband can retain $2,000 of countable assets. Tocompute what wife can retain, we divide the countable assets by two: $250,000 ÷ 2 = $125,000. Since this resulting number is over the maximum spousal resource allowance of $120,900, the wife gets to keep the full maximum allowance of $120,900. Therefore, husband has the allowable amount of $2,000 in resources but the wife has excessive countable resources of $127,100 which must be properly disposed of. The husband will not be eligible for Medicaid until the wife has reduced her countable assets to no more than $120,900 and no outstanding penalty periods remain.
2. Combined Countable Assets Less than Twice the Maximum Allowance, But More Than the Twice the Minimum Allowance. Let's assume a hypothetical couple has the same kind of assets as above, but the countable assets total only $150,000 (rather than $250,000). Husband can retain $2,000. To compute what wife can retain, we divide the countable assets by two, for a total of $75,000. Because $75,000 is between the minimum and maximum allowances, the wife can keep the full $75,000 as her maximum resource allowance, but the remaining $73,000 must otherwise be properly disposed of before the husband can be eligible for Medicaid.
3. Combined Countable Assets Less Than Twice the Minimum Allowance. Let's assume the same hypothetical couple has the same kind of assets as indicated above, but only has countable assets of $33,000. Husband can retain $2,000. To compute what wife can retain, if it weren’t for the fact that there is a floor, wife would only be able to retain one half of $33,000. However, because there is a minimum monthly resource standard of $24,180 (a floor), Wife can retain the full $24,180. The husband will be eligible for Medicaid once the wife's assets have been reduced to no more than $24,180, and the excess $6,820 in assets has been properly disposed of.
Disregarding Assets Post-Eligibility
After the institutionalized spouse qualifies for Medicaid long-term care assistance, the community spouse's resources are no longer deemed available to the institutionalized spouse. Medicaid Manual § M1480.230. However, special rules apply to Annuities. According to Susan Hart, the Medical Assistance Program Consultant of the Virginia Department of Social Services, an annuity owned by a community spouse does not need to be irrevocable, non-assignable, provide equal monthly payments, or be actuarially sound; it only must designate the state as beneficiary.
Minimum Monthly Maintenance Needs Allowance
Income Allowances for Community Spouses
The income allowances involving married couples with one spouse applying for Medicaid are quite different from rules relating to an unmarried individual. An unmarried Medicaid applicant can keep only $40 per month of income as a personal needs allowance, plus maintain supplemental health insurance; generally, the rest of the unmarried Medicaid recipient's income is paid to the nursing home as patient pay. For married Medicaid recipients, the income of the community spouse will continue undisturbed; he or she will not have to use his or her income to support the nursing home spouse receiving Medicaid benefits. Moreover, in some cases, the community spouse will be entitled to share in all or a portion of the monthly income of the nursing home spouse, rather than having it go to patient pay, depending on whether there is a shortfall because the community spouse’s income falls below the MMMNA. The DSS utilizes an income floor for the community spouse, known as the Minimum Monthly Maintenance Needs Allowance (MMMNA) to assess need.
1. 2017 MMMNA Calculation. The MMMNA is calculated and applied to the applicant’s spouse’s situation as follows:
$2,030 plus an excess shelter allowance equal to the amount by which the following expenses exceed $609: rent, mortgage payments, taxes, insurance and utility standard of $287.
2. The MMMNA cannot exceed $3,022.50 unless a court orders a greater amount.
3. Absent a court order, the MMMNA in 2017 may range from a low of $2,030 per month to a high of $3022.50 per month depending on whether or not there are excess shelter expenses.
4. If the community spouse's own income falls below his or her MMMNA, then the shortfall can be made up from the nursing home spouse's income. Medicaid Manual § 1480.410 et seq.