SPOUSAL IMPOVERISHMENT RULES:
2009 Medical Assistance Limitations
by
Attorney Jack Cashman
For additional information: link to Radosevich, Mozinski, Cashman & Olson LLP
When one spouse enters a nursing home for long term care, a common question is how much of the married couples' assets the healthy spouse, i.e, the 'community spouse' can keep. For Medical Assistance applications made after January 1, 2009, the community spouse may keep the greater of the first $50,000, or, one-half of the couple's combined assets to a maximum of $109,560. Every January the maximum amount is adjusted for inflation. This amount is over and above what are known as exempt assets, which the community spouse also may retain. Exempt assets include household goods and personal property, the home occupied by the community spouse, one vehicle regardless of value, pre-paid burial arrangements for each spouse with some limitations, a $1,500.00 or less life insurance policy for the institutionalized spouse, and certain retirement funds of the community spouse.
The institutionalized spouse may keep only $2,000.00 in liquid assets, which is part of the $109,560 discussed above. If the assets of the spouse in the nursing home exceed $2,000.00 in any month, Medical Assistance may find the spouse ineligible for further government-paid nursing home care. This results in the nursing home spouse having to pay for his or her own care.
The assets the community spouse may keep are called the 'Community Spouse Resource Allocation' (CSRA). That amount is set the first day the nursing home spouse is continuously institutionalized. In fact, that date may be before nursing home admission where the spouse is hospitalized before going to a nursing home. It is critical to determine all assets at the time the spouse is first institutionalized in order to maximize assets the community spouse may keep. Once assets are known, excess funds may be 'spent down' in a manner that most benefits the community spouse.
In making a Medical Assistance asset determination, it doesn't matter which spouse's name is on the asset, nor is there any affect from a marital property agreement the spouses may have. The couples' total non-exempt assets from all sources are simply added together.
Once the institutionalized spouse is found eligible for Medical Assistance, transfer of assets to the community spouse should occur. Generally, this will require transferring all assets to the community spouses' name before the first annual review, and carefully monitoring the institutionalized spouses' assets to ensure they do not exceed $2,000.00.
For additional information: link to Radosevich, Mozinski, Cashman & Olson LLP