Question: My mother has been taking care of my father – who has been diagnosed with Alzheimer’s Disease – for nearly three years. However, the last several months have proven to be most difficult for her, and we are trying to understand how, if Dad is admitted to a nursing home, mother can be protected. Are there set formulas dealing with the amount of income and assets my mother will be able to keep? How does this process work?Answer: Recognizing that the $3,000 to $5,000 per month cost of nursing home care will exhaust the lifetime savings of most elderly couples very quickly, Congress enacted The Medicare Catastrophic Coverage Act of 1988. Applicable in all 50 states and the District of Columbia, MCCA established what are called “spousal impoverishment rules” which are specific Medicaid eligibility rules that apply when one married spouse needs nursing home care and protect income and resources for the non-nursing home spouse. These rules apply when the spouse in the facility is expected to remain there for at least 30 days. Because the states have flexibility in applying these guidelines, the rules will vary from state to state.
As To Resources: At the time the Medicaid application is made, the appropriate state agency will examine the couple’s resources which, for this purpose, are combined. After exempting certain assets – such as the residence, household goods, an automobile, burial funds, and other non-countable assets, the net result is called the “spousal resource amount” which can not exceed the maximum permitted the applicant’s state of residence. While the maximum for 1999 is $81,960, this amount will vary from state to state.
In determining whether the nursing home spouse is eligible for Medicaid, the state will first determine the married couple’s total countable resources. In this process, the state will consider all resources held by both spouses to be available to the spouse in the medical facility -- except for what is called “the protected resource amount” which is the greater of a number of calculations.
What is then remaining is considered to be attributable to the nursing home spouse as countable resources. If this amount is below the state’s resource standard, the nursing home individual will be eligible for Medicaid. Once resource eligibility is determined, the assets of the community spouse are not attributed to the nursing home spouse.
As To Income: At no time will the non-nursing home spouse’s income be considered to be “available” to the nursing home spouse as, unlike the resource rules, the married couple is not considered to be a couple for income qualification purposes. In some states, if the nursing home spouse’s income exceeds the state’s income limits, the use of an income trust is authorized; in others, it is not.
After Medicaid eligibility is made, there is a determination of how much, if any, the spouse in the nursing home must contribute to the spouse in the community for his or her support. Deductions taken from the total income of the nursing home spouse each month include (1) a personal needs allowance of at least $30; .(2) an amount equal to the medical expenses incurred by the nursing home spouse, and (3) an amount, if any, which will to bring the non-nursing home spouse’s monthly income to the state maximum which, for 1999, is between $1,357 and $2,049 depending on where you live. If the non-nursing home spouse has income that exceeds the amount established by the state, there will be no deduction from the nursing home spouse’s income for that purpose.
After these and possibly other deductions depending on the circumstances, the balance of the nursing home spouse’s income will be contributed to his or her care and the state will pay any balance.
Taking the NextStep: Don’t forget that the financial issues are all irrelevant if the nursing home spouse does not meet the state’s medical level of care guidelines. Assuming these are met, depending on the circumstances, the qualification process can be most complicated. Since all of the ramifications of qualification can not be covered in this column, we highly recommend that you contact an elder law attorney in your area before taking any action.
Jan Collins is an award-winning writer and editor. Jan Warner is a matrimonial, elder law, and tax attorney. Both are based in Columbia, South Carolina.
Please send your questions to P.O.Box 11704, Columbia, S.C. 29211 or send your questions by email to janwarner@nextsteps.net.
