Preventing spousal impoverishment when only one spouse needs Medicaid.
Frederick Jacob - April 22, 2016
It’s no secret. In New Jersey long term care is very expensive and Medicare and health insurance plans do not cover the expense. If you don't have the financial means to pay for long term care you’re left with Medicaid.
But what happens when only one spouse has a medical condition severe enough that he or she requires special nursing care while the other is healthy?
Fortuntely, Congress passed the Medicare Catastrophic Act of 1988 which recognizes that it’s unfair to impoverish both spouses when only one of them needs to qualify for Medicaid. The outcome of this act created what is called “division of assets”. In a nutshell the couple has to gather all their countable assets (some assets are exempt) for a review by the state. The assets are divided in half, allowing the healthy spouse who will be staying at home to keep one half of the countable assets (aka: Community Spouse Resource Allowance - CSRA) to a maximum of nearly $120,000.
The other half must be spent down to $2,000. New Jersey will then establish what’s called the Minimum Monthly Maintenance Needs Allowance (MMMNA) for the healthy spouse who stays at home. This allowance lets the at-home spouse keep a monthly income between $2,000-$3,000. However, if the healthy, at-home spouse has a monthly income falling below this range, he or she is allowed to receive any monthly income that would normally go to the long term care spouse until the MMMNA is reached. The difference that’s left over goes to the nursing home.
As an attorney specializing in Elder Law and Asset Protection Planning I can help your spouse qualify for Medicaid while also making sure you do not fall victim to spousal impoverishment. There are creative ways to reduce your spouse’s half of the countable assets that will benefit you. Please take the time to contact me if this article pertains to your situation or pass my contact information along to someone you know who is struggling with this challenge.
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