The burden of long-term care is often too challenging for seniors to handle without Medicaid assistance. However, the asset and income limits for Medicaid eligibility are too low for most. It becomes more of a concern when you have one spouse needing long-term care while the other doesn’t. Fortunately, Medicaid has provisions for spousal impoverishment protection. Read on to learn more about protecting your spouse’s finances during Medicaid planning.
The Basics of Spousal Impoverishment Protection
Before covering spousal protection, let’s examine Medicaid’s income and asset limits. As of this writing, married couples can have up to $3,000 in countable assets. For income, the applicant can have no more than $2,829 in monthly income.
It is important to note that some assets do not count toward Medicaid eligibility. Read this post to learn more about which assets are exempt.
The Minimum Monthly Maintenance Needs Allowance
The Minimum Monthly Maintenance Needs Allowance (MMMNA) ensures a monthly income for the community spouse. Regarding spousal protection, Medicaid typically only counts the applicant spouse’s income. It disregards the income from the community spouse so they can keep that money for their basic needs.
However, there’s also the issue of couples with the applicant having all or most of the income. If the community spouse’s income is below the MMMNA threshold, they can receive a portion of the applicant spouse’s income. However, these limits change with time and vary by state.
Community Spouse Resource Allowance
Medicaid will treat assets jointly for eligibility purposes. With the Community Spouse Resource Allowance (CSRA), the non-applicant spouse can keep a portion of the joint assets. These assets can help ensure the community spouse’s expenses without affecting the applicant spouse’s Medicaid eligibility. However, the allowance for community spouses can vary significantly by state.
The Primary Residence
A primary residence will typically be exempt from Medicaid asset limits if the applicant or their spouse lives there. However, many states impose equity asset limits on the home. If the home exceeds the limit, it may be a countable asset. However, the equity interest is cut in half for married couples. That means only half the equity interest will count toward this limit for the Medicaid applicant.
Spousal Protection Strategies
While spousal impoverishment protection helps prevent poverty for the community spouse, there is more you can do. For example, a Medicaid Asset Protection Trust can help you preserve assets while obtaining eligibility. However, you must plan ahead and transfer assets to the trust at least five years before applying.
Are you interested in Medicaid planning and asset protection strategies? Click here to contact the Scott Law Offices. We can advise you on long-term care planning and create trusts to protect your assets. Reach out now to learn more.
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