SPOUSAL IMPOVERISHMENT
The expense of nursing home care -- which ranges from $2,000 to $3,000 per month or more -- can rapidly deplete the lifetime savings of elderly couples. In 1988, Congress enacted provisions to prevent what has come to be called "spousal impoverishment," leaving the spouse who is still living at home in the community with little or no income or resources. 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.
Resource Eligibility
The spousal impoverishment provisions apply where the member of the couple who is in a nursing facility or medical institution is expected to remain there for at least 30 days. When the couple applies for Medicaid, an assessment of their resources is conducted. The couple's resources are combined and exemptions for the home, household goods, an automobile, and burial funds are made. The result is the spousal resource amount, which the State determines. The spousal resource amount is the State's minimum resource standard ($15,348 in 1996); or the spousal share, which is equal to one-half of the couple's combined resources not to exceed the maximum permitted by the State ($76,740 in 1996).
In order to determine whether the spouse residing in a medical facility is eligible for Medicaid, a determination of the couple's total countable resource must be made. All resources held by both spouses are considered to be available to the spouse in the medical facility, except for the protected resource amount (PRA). The PRA is the greatest of:
- The spousal resource amount,
- The State spousal resource standard, which is the amount that the State has determined will be protected for the community spouse,
- An amount transferred to the community spouse for her/his support as directed by a court order, or
- An amount designated by a State hearing officer to raise the community spouse's protected resources up to the minimum monthly maintenance needs standard.
The remainder becomes attributable to the spouse that is residing in a medical institution as countable resources. If the amount of resources is below the State's resource standard, the individual is eligible for Medicaid. Once resource eligibility is determined, resources of the community spouse are not attributed to the spouse in the medical faciliy.
Income Eligibility
The community spouse's income is not considered available to the spouse who is in the medical facility, and the two individuals are not considered a couple for these purposes. The State is to use the income eligibility standards for one person rather than two. Therefore, the standard income eligibility process for Medicaid is used.
Post-Eligibility Treatment of Income
This process is followed after an individual in a nursing facility/medical institution is determined to be eligible for Medicaid. The post-eligibility process is used to determine how much the spouse in the medical facility must contribute toward his/her cost of nursing facility/institutional care. This process also determines how much of the income of the spouse who is in the medical facility is actually protected for use by the community spouse.
Deductions are made from the total income of the spouse who is residing in the medical facility in the following order:
- A personal needs allowance of at least $30;
- The community spouse's monthly income allowance (between $1,295 and $1918.50 for 1996, depending on your state of residence), as long as the income is actually made available to her/him;
- A family monthly income allowance;
- An amount for medical expenses incurred by the spouse who is in the medical facility.
The sum of these deductions subtracted from the income of the individual who is in the medical facility will result in the amount the individual must contribute to his/her cost of care.
See Section 1924 of the Social Security Act; U.S. Code Reference 42 U.S.C.1396r-5)
As of November 29, 1996
THESE MATERIALS WERE EDITED FROM THOSE PROVIDED BY HEALTH CARE FINANCING ADMINISTRATION (HCFA). BECAUSE THESE MATERIALS HAVE BEEN EDITED AND BECAUSE RULES AND REGULATIONS CHANGE REGULARLY, WE SUGGEST THAT YOU CONTACT YOUR LOCAL AUTHORITIES AND QUALIFIED LEGAL COUNSEL PRIOR TO ACTING.
