Amount of Spouse Income Allowed
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Spousal impoverishment rules are federal Medicaid regulations that are intended to prevent non-applicant spouses from becoming poverty-stricken in order for their applicant spouses to qualify for long-term care Medicaid.
Medicaid Asset Protection Trusts (MAPT) can be a valuable planning strategy to meet Medicaid's asset limit when an applicant has excess assets. This type of trust enables someone who would otherwise be ineligible for Medicaid to become Medicaid eligible and receive the care they require be at home or in a nursing home.
As its name suggests, an asset protection trust is designed to protect your assets. But, if designed correctly, this legal tool can serve other purposes as well. Typically, we think of creating an asset protection trust when someone is planning to apply for Medicaid.
Medicaid Spousal Impoverishment
In order to be eligible for Medicaid benefits a nursing home resident may have no more than $2,000 in assets (an amount may be somewhat higher in some states). In general, the community spouse may keep one-half of the couple's total "countable" assets up to a maximum of $123,600.
Most seniors cannot afford nursing home care, not on their own. The average monthly cost for a shared room is $6,692 per month or $80,304 per year. For a private room, it is even higher at $7,604 per month. That's a whopping $91,248 per year!
Under the Medicaid spousal impoverishment provisions, a certain amount of the couple's combined resources is protected for the spouse living in the community. Depending on how much of his or her own income the community spouse actually has, a certain amount of income belonging to the spouse in the institution can also be set aside for the community spouse's use.
Since Medicare does not cover long-term nursing home care
and few people can afford long-term care insurance, that leaves many
Americans to turn to Medicaid. Eligibility for Medicaid, at least when
it comes to nursing facility care or long-term home care, is based on
your assets as a couple.
This is where Medicaid planning becomes essential. How can you have few enough assets for your spouse to qualify but still have enough resources for you to live in the community?
Depending on how much of his or her own income the community spouse actually has, a certain amount of income belonging to the spouse in the institution can also be set aside for the community spouse's use.
Following is the minimum and maximum amount of resources and income that can be protected for a spouse in the community in 2019.
Post-Eligibility Treatment of Income
The post eligibility calculation is made to determine how much an individual in an institution (usually a nursing home) is able to contribute to cost of his/her own care. It applies only to individuals who are institutionalized (most commonly to those in nursing facilities) and to certain individuals receiving home and community-based waiver services. The process only applies to those with income and only after their Medicaid eligibility has been established.
The contribution is determined by first calculating the individual's total income and then deducting certain amounts from that income.
Specifically, the individual's contribution is his or her total income less the following deductions (often referred to as "protected amounts"):
Once the above items are deducted from the institutionalized individual's income, any remaining income is contributed toward the cost of his or her care in the institution.
Disclaimer: Elder Options of Texas is not rendering any legal or professional advice. If legal advice is necessary the reader should consult a competent attorney.
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