It is rare for both spouses to need long-term care. Typically, one spouse
enters a long-term care facility while the other continues to live at home. In
Medicaid terms, the spouse who enters a long-term care facility is called the “institutionalized
spouse” while the spouse who remains at home is called the “community
The primary concern for the community spouse is having enough assets and
income to continue living in the home. Fortunately, there are rules to
prevent the community spouse from becoming impoverished.
Resource Allowance and Exempt Resources
For 2016, the community spouse can have a maximum of $119,220.00 in “countable
assets.” As the term “countable assets” implies, certain
assets are not countable or “exempt.” The most important of
these assets would be the home used as the primary residence for the community
spouse provided that the value of the home does not exceed $552,000.00.
There is no limit on the dollar value of a car titled to the community
spouse and no limit on the value of the community spouse’s personal
property and household effects.
The institutionalized spouse can have a maximum of $2,000.00 in countable
assets in his her or name. Medicaid does require for the assets to actually
be divided so that $119,220.00 is only in the name of the community spouse
and $2,000.00 is in the name of the institutionalized spouse. However,
as a practical matter, re-titling of the assets does not need to be completed
before the application is approved.
Even with Medicaid, the institutionalized spouse must contribute nearly
all of his income towards the costs of the long-term care facility, and
Medicaid then makes up the difference. This means that the community spouse
will lose that source of income. However, the community spouse is allowed
a Minimum Monthly Maintenance Needs Allowance or “MMMNA” of
$1,992.00 per month. (This is the basic level. In exceptional cases this
amount can be increased up to a maximum of $2,981.00 per month.) This
means that if the community spouse’s income is less than $1,992.00
per month, she will be allowed to receive a portion of the institutionalized
spouse’s income that will bring his or her monthly income to the
$1,992.00 level. If the community spouse’s income exceeds the MMMNA,
there is no “penalty,” and her income will be hers to keep.
The community spouse will not be required to use any of her income to
help pay for the institutionalized spouse’s cost of care.
The Medicaid rules allow and actually favor ensuring that the community
spouse has sufficient resources and income not to become impoverished
herself. If countable assets exceed $119,220.00, the community spouse
has several options to spend this money down to the required level. These
options include improving an existing home that is badly in need of repairs,
purchasing new home, and purchasing a new car. The community spouse can
also purchase an annuity that complies with Medicaid regulations to provide
her with additional income. However, these rules can become a bit involved,
especially when it comes to annuities and retirement accounts. Failure
to comply with the rules could result in a denial of benefits.
Give us a call today to
consult with our experienced elder law attorneys.