Medicaid Eligibility and Coverage of Nursing Home Care for Married Couples
INFORMATION MARRIED COUPLES SHOULD KNOW ABOUT MEDICAID ELIGIBILITY AND COVERAGE OF NURSING HOME CARE
The Spousal Impoverishment Law
Due to the high cost of nursing home care, and the limitations of the Medicare and long
term care insurance, the Medical Assistance program (Medicaid) often becomes the ultimate
payor of nursing home care. Prior to a change in law, when one member of a couple entered
a nursing home almost all of a couple's assets had to be spend in order to establish
Medicaid eligibility for the institutionalized spouse, leaving the remaining spouse (the
community spouse) impoverished. Congress passed spousal impoverishment protections,
effective for nursing home admissions which occur on or after September 30, 1989, to allow
the community spouse to keep a certain amount of the couple's income and assets for his or
her own use. Under certain circumstances a community spouse can request approval to retain
a higher amount of income and/or assets. It is important for couple in this situation to
understand the Medicaid laws or to seek assistance in order to protect their rights.
Assessment of Assets
When one spouse enters a nursing home the facility must notify both husband and wife
that they have the right to request that the Division of Medical Assistance conduct an
assessment of their countable assets. The Division of Medical Assistance will then inform
the couple how their assets can be divided, establishing the amount of assets which can be
retained by the community spouse and the amount of assets which must be spent before the
institutionalized spouse will be eligible for Medicaid. It is advisable to have the
assessment completed upon admission because it will assist the couple with planning and
because financial records may be more readily available than at a later date.
Community Spouse Resource Allowance
In general, joint assets, if the couple has countable assets equal to or less than a
particular amount (currently $80,760), the community spouse may keep all of the assets.
The community spouse may request a hearing in order to be allowed to keep more than this
amount. (see Right to Request a Hearing). The spouse in the nursing home may have no more
than $2,000 in countable assets in order to be eligible for Medicaid. The Division of
Medical Assistance will notify the couple regarding the amount of assets which must be
spent before Medicaid eligibility will be established.
Spousal Maintenance Needs Allowance
Once Medicaid eligibility is established, the community spouse may be entitled to a
monthly needs allowance, based on his or he r income and housing costs. The community
spouse may be given an allowance from the income of the institutionalized spouse to
increase his or her monthly income up to a minimum monthly maintenance needs allowance,
which ordinarily will range between a minimum (currently $1327) and a maximum (currently
$2019 per month). The spousal needs allowance cannot exceed this maximum unless the
recipient or her spouse shows hardship at a fair hearing.
Right to Request a Fair Hearing
Either spouse can request a fair hearing to dispute the calculation of assets and/or
income. The community spouse can request a fair hearing to have the monthly maintenance
needs allowance increased above the maximum in the event of hardship.
The federal law also provides that either spouse can also request a fair hearing to
have the community spouse's resource allowance increased in order to generate income to
meet the monthly maintenance needs allowance. Couples are not always clearly advised of
their right to make such a request and may not be aware of the importance of doing so
until it is too late. By the time the spousal needs allowance is calculated, Medicaid
eligibility has generally been established and the couple's assets will have already been
spent down. Thus it is critical for married couples to understand the Medicaid regulations
and know that they can request a fair hearing as soon as the assessment is completed,
provided a Medicaid application has been filed.
Medicaid law changes often. The above information is accurate as of June 30, 1998.
This fact sheet has been provided by Greater Boston Legal Services 197 Friend Street,
Boston, MA 02114 (617) 371-1234.
Greater Boston Legal Services is supported by, among others, the following sources:
United Way of Massachusetts Bay, Inc. Mystic Valley Elder Services, Inc. Boston
Commission of Affairs of the Elderly Chelsea/Winthrop/Revere Home Care Corporation South
Shore Elder Services, Inc. Massachusetts Legal Assistance Corporation
Definitions
Medicare- A health insurance program administered by the
Social Security Administration. Pays for covered services, subject to deductibles and
co-payment.
Medicaid- A federal and state needs based program
administered by the Division of Medical assistance for eligible individuals. Pays entire
cost of covered services subject to spend down and patient paid amount of nursing home
care.
Countable Assets- Assets which the Division of Medical
Assistance will consider in determining eligibility (cash, money in the bank, stocks,
bonds, certain insurance policies).
Non-countable Assets- Certain assets are not countable and
can be retained by the applicant or spouse. Individuals or couples who plan to apply for
Medicaid may want to inquire whether any of their assets can be converted into non-
countable assets. Burial funds set aside in accordance with Medicaid regulations are not
countable. The home of a Medicaid recipient is not a countable asset, even if the
recipient is in a nursing home, provided that the nursing home recipient intends to return
home.
Fair Hearing- Most decisions of the Division of Medical
Assistance can be appealed by requesting a fair hearing. It is important to file a request
for a hearing within the required time limit, ordinarily 30 days after the initial
decision of the Division of Medical Assistance. Medicaid recipients have the right to
continue receiving benefits pending appeal if a hearing request is filed within a
specified time.