When applying for Medicaid benefits to help pay for long-term care, the applicant must list the value of all of their assets that are “countable” under the eligibility rules of the program, as administered in this state by the Connecticut Department of Social Services (“DSS”). Some assets are fully exempt and we will describe those exempt assets in a future article. All other assets must be counted.
The question of how much of the countable assets you can keep under DSS rules and still be eligible for benefits depends in part on whether the applicant is single or married.
If the Medicaid applicant is single, the rules are quite simple and straightforward. He or she can have no more than $1,600 to be eligible for benefits. If for any reason the assets in their bank account in a given month exceeded $1,600, they would temporarily become ineligible and their benefit payments would stop. On the income side, a single Medicaid benefit recipient is allowed to retain and spend $60 each month on what is termed their “Personal Needs Allowance,” and to keep any supplemental health insurance policies in force. All income above and beyond those amounts must be paid to the nursing home. $1,600 in assets and $60 in disposable income is quite small indeed and clearly the program eligibility rules are premised on granting benefits only to those who are completely financially impoverished.
When a Medicaid applicant is married, the rules are different. Provided the applicant’s spouse is not also a nursing home resident, that spouse is termed the “Community Spouse,” since they are living outside of a facility, out in the community. In that situation the nursing home resident still has the same $1,600 / $60 limits described above. However, the community spouse can keep significantly more.
For assets, DSS will add together all of the countable assets of the institutionalized spouse and the community spouse and divide that total by two. That amount is compared to a set minimum and maximum that community spouses are allowed to keep. Those amounts change each January 1 and are currently set at $23,844 and $119,220, respectively. If half of the total assets owned by the couple exceeds that maximum amount, the couple will need to “spend down” their assets until the amount they own has been diminished down to that maximum plus the $1,600 that the institutionalized spouse is permitted to own). If the couple’s assets fall in between the minimum and maximum, then they need to spend down to an amount equal to half of their total assets. In certain circumstances, we may be able to increase the Community Spouse’s protected asset amount even beyond the maximum amount to prevent the impoverishment of the community spouse and to allow the community spouse to be able to remain living at home.
For a couple, the income rules operate differently as well. The community spouse is allowed to keep all of their income; none of that spouse’s income needs to be paid to the nursing home. As to the income of the institutionalized spouse, some portion of that income may be retained for the use of the community spouse and will not have to paid to the nursing home. Briefly, DSS will look at the amount of the community spouse’s income and housing costs to arrive at a figure called the “Minimum Monthly Needs” allowance. If the community spouse’s actual income is lower than that amount, then the nursing home resident’s income can be allocated to the community spouse, to bring the community spouse up to that minimum amount. Additional income of the institutionalized spouse beyond that will be paid to the nursing home. Again, there are circumstances of extreme hardship where we may be able to divert even more of the institutionalized spouse’s income to the community spouse to prevent his or her total impoverishment.
Generally, there are fewer planning options available once someone has to go into a nursing home immediately. However, there is a lot of valuable planning we can do for clients who are willing to act long before a move into a nursing home is anticipated. The best time to act is more than five years before a Medicaid application is filed. Acting earlier than that point means much of the family’s wealth can be fully protected by the time Medicaid assistance is needed. Since few people know precisely when they will need the services of a nursing home, it is always better to start planning as early as possible.
Please call us at 860-769-6938 if you have any questions about the issues presented above or if you care to discuss any other planning issues with us.
Medicaid Bloomfield CT