Tag Archives: spousal allowance

Will Medicaid Take My Home?

A common assumption is that if you enter a nursing home, Medicaid will immediately take your house to pay for your care. In reality, that is not exactly true. Here are three common scenarios:

1) If you are married, your spouse is always allowed to stay in the house as long as he or she lives. However, after both spouses die, the State of Ohio will sometimes put a lien on the home. If that happens, the State will make a claim for the amount they have paid out in Medicaid benefits. This claim would then usually be paid from the proceeds of the house sale. With proper legal planning, this can sometimes be avoided.

2) If your spouse dies while you are still living in the nursing home, Medicaid may demand that you sell the home and use the proceeds for your nursing home costs. Again, depending on the circumstances, you can sometimes preserve the family home. Each situation is different. For example, if a son or daughter is living in the home and provided two years of care to the nursing home resident, this child can sometimes be given the home as a gift to avoid a forced sale by Medicaid. This is usually referred to as the child caretaker exception. Unfortunately, the Medicaid caseworker will not always let you know about this rule.  Another exception is if you have have a permanently disabled child. In that situation, the home can usually be given to that child, without adverse Medicaid consequences.

3) If you enter a nursing home and do not have a spouse or child living in the home, Medicaid will allow you to keep the house as long as you intend to return home. Otherwise, you must sell the home before you can attempt to qualify for Medicaid. There are some exceptions to this rule, such as the child caretaker rule. When the home sells, the proceeds must generally be used for your nursing home care. If you die before selling the home, the State of Ohio will usually put a lien on the home. If that happens, the State will make a claim for the amount they have paid out in Medicaid benefits.

The good news however, is that through proper legal planning, you can sometimes preserve the entire value of the home for future generations. Even in cases where Medicaid demands that you sell the home, there are often ways to preserve a portion of the sale proceeds for your family.

Each situation is unique, so you must consult with a qualified elder law attorney to go over your best options.

Medicaid Numbers for 2017

The Medicaid numbers for 2017 were recently updated.

For a nursing home Medicaid recipient with a spouse living in the community, the numbers are as follows:

Community Spouse Monthly Income Allowance:

Minimum Monthly Maintenance Needs Allowance: $2,030

Maximum Monthly Maintenance Needs Allowance: $3,023

 

Community Spouse Asset Allowance:

Minimum Community Spousal Resource Allowance: $24,180

Maximum Community Spouse Resource Allowance: $120,900

Excess Shelter Standard: $609

Standard Utility Allowance: $513

 

For the nursing home resident, the numbers are:

Monthly Personal Needs Allowance: $50

Resource Allowance for an Individual: $2,000

 

For purposes of calculating the penalty for gifts made within five years, the number is as follows:

Average Private Pay Rate in Ohio: $6,570

(In general, this means that for every $6,570 given away within the last five years, one month of nursing home coverage will be forfeited.)

Medicaid Releases Updated 2015 Numbers

The Medicaid numbers for 2015 were recently updated.

For a nursing home Medicaid recipient with a spouse living in the community, the numbers are as follows:

Community Spouse Monthly Income Allowance:

Minimum Monthly Maintenance Needs Allowance: $1,967

Maximum Monthly Maintenance Needs Allowance: $2,981

 

Community Spouse Asset Allowance:

Minimum Community Spousal Resource Allowance: $23,844

Maximum Community Spouse Resource Allowance: $119,220

Excess Shelter Standard: $590

Standard Utility Allowance: $498

 

For the nursing home resident, the numbers are:

Monthly Personal Needs Allowance: $50

Resource Allowance for an Individual: $1,500

 

For purposes of calculating the penalty for gifts made within five years, the number is as follows:

Average Private Pay Rate: $6,327

(In general, this means that for every $6,327 given away within the last five years, one month of nursing home coverage will be forfeited.)

Medicaid Releases Updated 2014 Numbers

The Medicaid numbers for 2014 were recently updated.

For a nursing home Medicaid recipient with a spouse living in the community, the numbers are as follows:

Community Spouse Monthly Income Allowance:

Minimum Monthly Maintenance Needs Allowance: $1,939

Maximum Monthly Maintenance Needs Allowance: $2,931

 

Community Spouse Asset Allowance:

Minimum Community Spousal Resource Allowance: $23,448

Maximum Community Spouse Resource Allowance: $117,240

Excess Shelter Standard: $582

Standard Utility Allowance: $463

 

For the nursing home resident, the numbers are:

Monthly Personal Needs Allowance: $45

Resource Allowance for an Individual: $1,500

 

For purposes of calculating the penalty for gifts made within five years, the number is as follows:

Average Private Pay Rate: $6,114

(In general, this means that for every $6,114 given away within the last five years, one month of nursing home coverage will be forfeited.)

What Is Division of Assets?

Division of Assets is the name commonly used for the Spousal Impoverishment provisions of the Medicare Catastrophic Act of 1988. It applies only to married couples. The intent of the law was to change the eligibility requirements for Medicaid in situations where one spouse needs nursing home care while the other spouse remains in the community (i.e. at home or in an assisted living facility). The law, in effect, recognizes that it makes little sense to impoverish both spouses when only one needs to qualify for Medicaid assistance for nursing home care.

As a result of this recognition, division of assets was born. Basically, in a division of assets, the couple gathers all of their non-exempt (countable) assets together in a review. See below for a list of exempt assets.

The non-exempt assets are then divided in two, with the community (or at home) spouse allowed to keep one-half of all countable assets up to about $115,920. The other half of the countable assets must be “spent down” until $1,500 remains for Ohio residents and $2,000 for Kentucky residents. The amount of countable assets which the at-home spouse gets to keep is called the Community Spousal Resource Allowance (CSRA).

Each state also establishes a monthly income floor for the at-home spouse. This is called the Minimum Monthly Maintenance Needs Allowance (MMMNA). This permits the community spouse to keep a minimum monthly income ranging from about $1,939 to $2,898.

If the community spouse does not have at least $1,939 in income, then he or she is allowed to take the income of the nursing home spouse in an amount large enough to reach the MMMNA. The nursing home spouse’s remaining income (minus a personal needs allowance) goes to the nursing home. This helps avoid the necessity for the at-home spouse to dip into savings each month, which would result in gradual impoverishment.

Exempt Assets

• The Home up to around $500,000. The home must be the principal place of residence.

• Household and Personal Belongings, furniture, appliances, jewelry and clothing.

• One Vehicle and there may be some limitations on value.

• Burial Plot and Irrevocable Funeral Plans for you and your spouse.

• Life Insurance policies as long as the cash surrender value of all policies combined does not exceed $1,500. If they do exceed $1,500 in total cash surrender value, then the cash value in these policies is countable.

The bottom line is you must seek advice from someone who knows Medicaid law.

Medicaid Releases Updated 2013 Numbers

The Medicaid numbers for 2013 were recently updated.

For a nursing home Medicaid recipient with a spouse living in the community, the numbers are as follows:

Community Spouse Monthly Income Allowance:

Minimum Monthly Maintenance Needs Allowance: $1,892

Maximum Monthly Maintenance Needs Allowance: $2,898

 

Community Spouse Asset Allowance:

Minimum Community Spousal Resource Allowance: $23,184

Maximum Community Spouse Resource Allowance: $115,920

Excess Shelter Standard: $568

Standard Utility Allowance: $456

 

For the nursing home resident, the numbers are:

Monthly Personal Needs Allowance: $40

Resource Allowance for an Individual: $1,500

 

For purposes of calculating the penalty for gifts made within five years, the number is as follows:

Average Private Pay Rate: $6,114

(In general, this means that for every $6,114 given away within the last five years, one month of nursing home coverage will be forfeited.)

Elder Law Success Story in Cincinnati

Elder law attorneys assist individuals and families in developing estate plans to avoid depleting their assets should they become ill and need long term care. For those individuals who are already in a nursing home, elder law attorneys can help them qualify for Medicaid benefits while maximizing the amount of money they are able keep.
When an individual comes into our Cincinnati, Blue Ash or West Chester offices after having placed their spouse in a nursing home, they are often fearful of having to spend one-half of all of their assets. It is a wonderful feeling to be able to tell them, “don’t worry…you can keep more of your life savings and still qualify your spouse for Medicaid.” Often times, however, by the time individuals meet with us, they have already needlessly spent thousands of dollars simply because they weren’t educated on the Medicaid rules.
Naturally, in times of crisis such as placing your loved one in a nursing home, an elder law attorney is not the first person with whom most people discuss their concerns. It is usually a social worker at a hospital or a nursing home, a family friend, neighbor or sometimes a financial planner. So, when a social worker or financial planner invests the time with families and recognizes the need for a person to seek the advice of an elder law attorney, this can mean not only saving the family thousands of dollars…but it can also mean giving the family total peace of mind.
Many of you on our mailing list have helped more families than you will ever realize. We thought we would take this opportunity to share with an examples of the difference you’ve made in their lives.
* * * * * *
Mr. and Mrs. Smith had assets (not including their home) of approximately $220,000.  Mrs. Smith entered a nursing home in July 2011 and paid her own way for one year. The family heard from a friend they could make annual gifts of $12,000 per year per person to each of their two children. So, they gifted $48,000 on their own — without any legal advice. When the family came to our office we advised them to return all the gifts they had made or else they would need to pay for another six months of nursing home expenses out of their own pocket. Next, we re-applied for Medicaid in July 2012. Mrs. Smith received Medicaid benefits immediately. In this case, due to the advice of the social worker (along with our legal assistance) the family was able to save over $64,000!

MEDICAID SPEND-DOWN

There is a great deal of confusion regarding the spend-down of assets for Medicaid qualification.

For a single person, who can only keep $1,500 in Ohio and $2,000 in Kentucky, that individual may find him or herself won­dering what the money can be spent on without causing any Medicaid disqualification.

Similarly, for a married couple, the rules are even more complex. The community spouse, (i.e. the at-home spouse) may generally keep roughly one-half of the couple’s assets up to a maximum of about $113,640. Depending upon their resources, again the couple may have a substantial amount of money which needs to be spent before the nursing home spouse qualifies for Medicaid.

That is often where the confusion begins. That’s because there is so much misinformation about what kinds of things the money can be spent on.

For someone who is pursuing Medicaid eligibility, the following are the types of spend-down items, in no particular order, which should be considered:

1. Purchase pre-paid funeral plans. The rules regard­ing funerals are complicated so you should only deal with a funeral home knowledgeable in this type of planning.

2. Make home improvements. Home improvements are often an excellent use of funds in a Medicaid spend-down. For instance, the community spouse might fix the roof, get a new air conditioning system, new carpeting, new furniture, etc. The intention here is to fix the house up so that, hopefully, no other home repairs will need to be done during the lifetime of either spouse. That is especially important since the community spouse will have to spend down one-half of his or her assets and may no longer have the resources necessary for large expenditures later.

3. Buy household goods or personal effects. Once again the intention is to have the community spouse get the types of things which are needed to keep the household running without major expenditures down the road.

4. Attorney, Accountant and other Professional Fees. Paying professional fees can be an effective way to access expert advice, while also helping achieve your spend-down.

These are, of course, not the only items that qualify. The main rule to keep in mind is that whatever goods or services are purchased must be done at fair market value.

Also, don’t let anyone tell you that anything spent must be done solely for the benefit of the nursing home-spouse. However, please bear in mind, that in the case of a married couple, the spend-down may only begin 30 days after the nursing home stay has started.