My name’s Kevin Petracek. I’m an attorney with the law firm of Parman and Easterday in Overland Park, Kansas. In this segment of the ElderCare channel, I’ll be discussing how to avoid spousal impoverishment. We are often asked by married couples to help them apply for Medicaid when only one of them needs to enter a nursing home. It is a common misconception that all of the couples assets must be spent down before Medicaid will begin paying for the nursing home expenses of the ill spouse. In many cases the spouse remaining at home is able to protect a significant portion of the income and resources that the couple has accumulated over the years. This means a spouse needing care can receive Medicaid sooner while the healthier spouse still living at home won’t be reduced to poverty.
It may be necessary to transfer some assets from the institutionalized spouse to sole ownership of the at-home spouse, but these transfers can be challenging so it may be advisable to use an attorney to help prepare the legal documents required for these transfers. Some assets are considered to be exempt under Medicaid in certain circumstances. For example, a spouse needing nursing home care can sometimes qualify for Medicaid while the healthy spouse is allowed to keep the couple’s home, and its contents, one car, a funeral plan including burial plots and caskets for each spouse, and personal items, such as wedding rings and clothes. In some cases it is even possible for the healthy spouse to keep the assets from an ongoing business.
Finally, the healthier spouse can keep additional non-exempt resources with a total value of at least $23,000, and sometimes as much as $117,000. These numbers vary depending on your particular circumstances, and they usually increase a little bit each year due to cost of living adjustments. The remaining amount of combined resources is considered available to the institutionalized spouse so that money will have to be spent before Medicaid eligibility is available. Once an ill spouse qualifies for Medicaid the healthy spouse will not be required to contribute any of her own income toward the cost of care for the ill spouse. In fact, the healthy spouse may be able to keep a portion of the institutionalized spouse’s income.
Again, this amount depends on your specific financial situation, but often the healthy spouse can keep approximately $2,000 per month of the total income of both spouses, plus if there are shelter expenses such as rent, mortgage interest, real estate taxes, and insurance, you may be entitled to an allowance of as much as $3,000 per month to cover these types of expenses. Also, a special monthly allowance is available for any dependent family members living with the at-home spouse. As mentioned earlier, it may be advisable to seek the assistance of an attorney who is experienced in the Medicaid application process. If a couple’s assets are not divided in compliance with the state regulations the state agency can disqualify the applicant for Medicaid for up to five years.