Medicaid is a government program that pays for medical services, including nursing home care. To get Medicaid payment for nursing home care, you must be financially eligible, need the care given in a nursing home, and the home must be certified by the state Medicaid agency.
Medicaid pays a large portion of our country's nursing-home bill (over 40 percent). But Medicaid pays only when almost all your assets have been depleted. What about when a spouse needs to be in a home but the other spouse does not? Will all of the couple's income and assets have to be used up before Medicaid will step in?
In 1988, Congress passed the Medicare Catastrophic Coverage Act. Provisions of the Act provide spousal impoverishment protection for legally married couples when one spouse is in a nursing home and the other spouse is not. (The person in the nursing home is referred to as the “institutionalized spouse,” and the other spouse is the “community spouse.”)
The purpose of this federal Spousal Impoverishment Protection Law is to allow the community spouse to keep some of the couple's income and assets while still qualifying the nursing home spouse for Medicaid. These provisions help ensure that this situation will not occur and that community spouses are able to live out their lives with independence and dignity.
Under these spousal impoverishment provisions, a certain amount of the couple's combined resources is protected for the spouse living in the community. Depending on how much of his or her own income the community spouse actually has, a certain amount of income belonging to the spouse in the institution can also be set aside for the community spouse's use.
The following are the minimum and maximum amounts of resources and income that can be protected for a spouse in the community in 2011:
A snapshot of the couple's assets is taken in order to determine the community spouse's share. The snapshot reflects the couple's assets at the time of the Medicaid applicant's first continuous (minimum 30 days) institutionalization (in a nursing facility or hospital).
When an institutionalized spouse is applying for Medicaid, the couple will need to complete a resource assessment tool based upon the resources (assets) owned at the snapshot date and an application for Medicaid (which asks for information about current resources). The community spouse's share is calculated from the resource assessment tool. The institutionalized spouse's eligibility is determined from the application. Assets of a married couple are generally considered to be jointly-owned no matter in whose name they have been placed.
The community spouse is also entitled to a Minimum Monthly Maintenance Needs Allowance, which may come in whole or in part from the income of the institutionalized spouse. This is triggered if the community spouse's income is below a spousal allowance figure. This figure is set by the state under federal guidelines. Some states may also permit the community spouse to keep a shelter allowance for rent, mortgage, taxes, insurance, and utilities.
As you can see, the rules surrounding these Medicaid provisions are quite complex. You would be wise to contact a Medicaid attorney.