(How to keep more for spouse if ill spouse needs to go into nursing home or needs care at home)
As we live longer, there is a greater likelihood of disability and the need for long-term care. However, most Americans have inadequate resources or income for such care and also lack long-term care insurance or similar insurance products. As a result, some elderly and disabled seek public benefits (such as Medicaid) to help defray such cost. However, the government looks at the applicant’s resources as entitlement to such benefits are “means-tested” prior to the government paying for benefits. Annual increases to the maximum protected resource amount (the maximum amount the good spouse, hereinafter the “community spouse”, can keep – although this amount can be expanded) is tied to the Consumer Price Index for all urban consumers. Based on such an index increase of 5.9%, for the year 2022, the maximum protected resource limit for the spouse of a long-term care Medicaid applicant is projected to be $137,400 (presently $130,380) and the minimum protected resource amount for the community spouse will be $27,480.
As many of you know, when one spouse lives in a nursing home in a Medicaid bed and applies for nursing home Medicaid (the “institutionalized spouse”) and one spouse lives at home or in the community (the “community spouse” as mentioned above), the Texas Health and Human Services Commission (HHSC), which governs Medicaid eligibility, takes a snapshot of the couple’s countable resources (some examples of non-countable resources are pre-need funeral arrangements with a waiver of the right to cancel, homestead presently with an equity limit of $603,000 if single, one car (regardless of value), etc.) as of the first day of the month in which the institutionalized spouse receives at least 30 days of continuous skilled care. HHSC looks at the first day of that month as the date to determine the protected resource amount (“PRA”) for the community spouse. This is the number of countable resources that can be kept by the community spouse if there is no expansion as explained below.
Although the maximum protected resource for 2022 is projected to be $137,400, the community spouse can often expand the PRA if the non-countable resource income of the couple is less than the minimum monthly maintenance needs allowance (MMMNA) which is present $3,259.50 but projected to rise to $3,425.00 as of January 1, 2022. Thus, the non-countable resource income (typically Social Security or a pension) of both spouses must be below $3,425.00 for there to be a possibility of expansion. Therefore, if the non-countable resource income of the couple is below the MMMNA, often the couple might have hundreds of thousands of dollars and still be eligible for Medicaid (notwithstanding the new projected $137,400 “maximum” limit) since more resources are needed when interest rates are low to have adequate income up to the allowable limit. On January 1, 2022, the minimum protected resource amount (the minimum amount of resources that can be kept if the couple’s non-countable resource income is above the MMMNA) is rising from $26,076 to $27,480. These are numbers that most elder care attorneys follow very closely.
To determine the PRA, calculate the couple’s countable resources and divide that number by two. The result is the PRA – unless it is above the maximum PRA ($137,400 as of January 1, 2022) or below the minimum PRA ($27,480 as of January 1, 2022). Thus, HHSC would allow the community spouse 1/2 of the couple’s countable resources as of the snapshot date unless it is above the maximum PRA or below the minimum PRA if the couple’s income is greater than the MMMNA.
For example, if the couple has $30,000 of countable resources and the monthly non-countable resource income of the couple exceeds $3,425 (the MMMNA in the year 2022), then since $30,000 ÷ 2 = $15,000 is less than the minimum PRA, the PRA that could be kept by the community spouse would be at least $27,480 (projected for 2022) in addition to the $2,000 that could be kept by the institutionalized spouse for a total of $29,480. The remaining $520 would have to be “spent down” by paying debts, buying non-countable resources, or making exempt transfers. The PRA could be expanded (in which case all countable resources might be able to be kept by the community spouse without any change to such resources) if the non-countable resource income is less than the MMMNA – which is permitted due to spousal prevention from impoverishment laws (the government does not want to encourage divorce). More countable resources can be kept if income is lower.
Similarly, if a couple has $500,000 of countable resources and the gross non-countable resource income is greater than the projected $3,425 per month, then since $500,000 ÷ 2 = $250,000 which is greater than the maximum PRA of $137,400, the PRA would be $137,400 and $362,600 ($500,000 – $137,400) would need to be “spent down” prior to Medicaid eligibility (buying exempt resources, payment of bills, make certain exempt transfers, etc.). The institutionalized spouse can keep $2,000 in addition to that amount.
However, if the non-investment or non-countable resource income of the couple is less than the MMMNA ($3,425 in 2022) there often can be an expansion of the PRA. Thus, in the example above, in certain cases, a couple might have $500,000 or more of countable resources and the institutionalized spouse could still achieve Medicaid eligibility and the community spouse could keep all $500,000. Since interest rates are very low, often more can be protected than ever before at present. More countable resources can be kept if income is lower.
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