Jun 15

The Married Couple’s Guide to Planning for Medicaid

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Attention all Married Couples and Those who may be caring for aging Parents, Relatives, or others with a Spouse:

Last month’s newsletter featured an article on the benefits of planning early to protect assets so that single individuals can qualify for Medicaid if health declines and there is a need for assistance later in life. The rules of Medicaid eligibility are different for married couples than for single individuals. It is important for couples to realize what is at stake and to understand the distinctions.

When the health of one spouse fails to the point at which they require regular help with the activities of daily living (bathing, dressing, toileting, transferring, meal preparation, and incontinence), there are few choices when it comes to how to pay for that care. The only choices for most individuals are to pay privately, often at a cost of over $8,000.00 a month, or qualify for public assistance in the form of Medicaid. Many couples make costly mistakes before ever seeking legal counsel, based on informal conversations at places like the beauty salon or the coffee shop.

What’s at stake? When one spouse applies for Medicaid, the individual as well as the joint assets of both spouses are considered countable resources to pay for care and are therefore at risk. The spouse needing care is referred to as the “institutionalized spouse” while the well spouse is referred to as the “community spouse”. One of the major goals of planning is to protect as much of the couple’s savings as possible for the community spouse, while qualifying the institutionalized spouse for Medicaid.
The Medicaid exemptions for a married couple are different than for a single individual, and include the following:

• The Community Spouse is entitled to keep half of the couple’s combined total assets (not to include exempt assets), but only up to a maximum of $120,900.00. Assets include the cash value of whole life insurance policies, savings bonds, investment accounts, individual retirement accounts, time share ownership, and business interests.
• Exempt assets include the home in which the community spouse is living, one car, life insurance policies with a face amount of $1500.00 or less, and irrevocable pre-paid funeral and burial arrangements for both spouses.

The couple’s combined total assets are determined as of the “snapshot” date. This is the first day that one spouse enters a medical institution, receives home and community based waiver services, or receives services under a program of all-inclusive care for the elderly for a period of at least 30 days. We see many couples who have spent down their resources on items such as home improvements that are considered allowable by Medicaid, but in doing so prior to the snapshot date have actually reduced the amount that can be protected for the community spouse.

There are also special income allowances that are available to the community spouse. These include a minimum income allowance of $2003.00 that can be increased to as much as $3,023.00 if certain conditions are met, a shelter standard, and a standard utility allowance. If the community spouse’s income is less than the amount allowed, he or she may be entitled to a portion of the institutionalized spouse’s income to make up the difference.

Couples who want to preserve a greater portion of their total combined wealth are advised to plan well ahead of the time when they are likely to need ongoing assistance. They will have far more options available to them with pre-planning than when planning during a crisis brought on by a sudden medical event or rapid decline in health. However, when a crisis does occur, it still may not be too late to protect a significant amount of the couple’s assets. Working with an experienced elder law attorney can make all the difference. Call Butcher Elder Law for a consultation to learn how you can protect your savings and qualify for assistance when the need arises. Prevent mistakes. Preserve assets.