Medicaid Part 2 - Community Spouse Resource Allowance

Last time we discussed some of the broad general rules about what resources you can keep and qualify for Medicaid.  Those rules were for a single individual.  The rules vary greatly when the applicant is married. 

Generally, when you are married there is a snapshot taken of a date that a person needs long-term care.  That snapshot can go all the way back to a hospitalization. 

The snapshot is a freeze frame of the resources that you have on that snapshot date.  Some of those resources are going to be countable, and some are not going to be countable.  Some are going to have to be spent down, and others are not going to have to be spent down.

The countable resources are divided between the ill spouse and the well spouse.  There is a minimum and maximum amount that the well spouse can keep.  Generally, the well spouse can keep half the countable resources with a minimum of $32,000, or a maximum of $162,000. The ill spouse gets the rest and will not qualify until his/her resources are spent down to the Medicaid limit ($2000, home, car, personal property, $1500 of life insurance and a reasonable funeral plan). 

Here is an example. Mr. Smith is in the nursing home, paying $12,000 per month.  He and Mrs. Smith have countable resources of $400,000.  Under the Medicaid rules, Mrs. Smith can keep $160,000.  The remaining $240,000 must be properly spent down to $2000 before he will qualify for Medicaid. (When I say properly, I mean spent in such a way as to not disqualify Mr. Smith from Medicaid.)

That is $160,000 for Mrs. Smith is not a lot of money when you are talking about that is how much she is going to have for the rest of life. 

When we are working with a family facing long-term care, we want to talk about how we can maximize the amount of money and income that the well spouse can keep.  We focus a lot on the well spouse, because usually that person is also the caregiver. 

Next time we will talk about what is countable and what is not countable.

Medicaid has its place. It can be wonderful relief for a family. But the rules are tricky. The rules are harsh. I rarely recommend going in alone.

If you would like a copy of my booklet “The Consumer's Guide to Medicaid Planning”, or if you need to schedule a consultation, give my office a call at 785-625-8040, go to our website (www.clinkscaleslaw.com) or email us at info@clinkscaleslaw.com.