Medicaid Long-Term Care Benefits
Medicaid is a joint federal and state program that provides crucial support for individuals who have low incomes or disabilities, including seniors who require long-term care services but can't afford them. The program serves as a vital safety net for the long-term care needs of aging adults, covering various services, depending on your state. For example, you may be able to receive assistance paying for a nursing home facility, some assisted living costs or Medicaid home care services.
However, the eligibility rules for Medicaid long-term care benefits are complex, and the application is confusing. If you don't fully understand how to qualify, you can make mistakes that delay the funds you desperately need to pay for care.
Does a Spouse's Income Affect Medicaid Eligibility?
Medicaid considers a couple's assets and income in determining eligibility. That's why many aging adults worry they will lose their homes before qualifying for coverage to pay medical expenses. They're also troubled about what will happen to a spouse who is still healthy. If one qualifies for care based on joint income, money, and property, how will it affect the other's living arrangements and expenses?
Can a Nursing Home Take Your Spouse's Pension?
Aside from your home, a pension or other retirement account may be your most significant financial resource. The idea that it might be taken to pay for medical expenses is scary. If you or your spouse qualify for Medicaid, you will be required to pay a portion of your cost from your own income. A pension is considered a countable income resource when applying for Medicaid. If your income or asset level doesn't allow you to qualify for Medicaid, you will have to pay the cost out of your own pocket.
401(k)s and IRAs
When companies began offering 401 (k) plans instead of pensions, employees often rolled them over into IRAs on retirement. Under state Medicaid laws, retirement accounts can count toward your asset limit or your income limit.
There are times when retirement accounts can be exempt, depending on what state you live in, whether you are receiving payments, and which spouse owns the account. But most states view retirement accounts as countable, regardless of payout status or ownership. Even if vour retirement account takes you over Medicaid's asset or income limit, you can still become eligible, but the legal strategies are complicated.
You can cash out vour retirement account and spend down the proceeds until you're below the asset limit, but there are strict rules on what you can spend the money on, described under the community spouse resource allowance (CSRA) provision. You also may experience significant tax consequences.
Discuss the need for government benefits and their effect on your pension or retirement account with an elder law attorney and financial advisor before long-term care services become necessary. It's the best way to find a solution that works for you.
Can One Spouse Be on Medicaid and the Other Not?
If one spouse requires long-term care while the other remains at home, the healthy spouse risks financial hardship if the cost of care exceeds their combined available resources. To prevent this, the healthy spouse (community spouse) may use Medicaid's spousal impoverishment rules to retain income and assets.
These particular rules are designed to prevent a healthy spouse from falling below the poverty threshold while maintaining a reasonable standard of living The healthy spouse retains a certain level of income and assets without jeopardizing the institutionalized spouse's benefits for necessary care.
Certain assets, like a primary residence, personal belongings, and a vehicle, may be exempt from consideration in determining the institutionalized spouse's eligibility for Medicaid long-term care. The exact amounts and thresholds can vary by state and are subject to changing Medicaid regulations.
Community Spouse Resource Allowance (CSRA)
A married couple's financial resources, called assets, have different rules than those that apply to income. All assets are considered jointly owned and count toward the Medicaid applicant's asset limit, even if only one spouse applies for long-term care Medicaid. The community spouse resource allowance (CSRA) preserves a portion of combined assets for the person who remains at home. Meanwhile. other assets are exempt and not counted toward the asset limit. Exempt assets generally include:
A primary home
Household furnishings and appliances
Personal items, like clothing and wedding rings
A vehicle
Countable assets for Community Spouse Resource Allowance (C S R A) include cash, stocks, bonds, motorhomes, and bank account funds. Exempt assets for C S R A include clothing, a primary residence (in most cases), and household furniture and appliances.
While a Medicaid applicant is generally limited to $2,000 in assets, the CSRA allows the community spouse to retain a much higher amount. The federal government sets a minimum and a maximum resource allowance, which increases annually. In 2024, the spouse at home is permitted to have up to $154,140 in assets.
Combined assets
It is important to note that each state has its own formula for determining the amount of assets that a community spouse can retain.
