Qualification Basics

In order to be eligible for Medicaid benefits a nursing home resident may have no more than $4,000 in "countable" assets. The spouse of a nursing home resident — called the ‘community spouse’ —
is limited to assets up to $99,540 (in 2006) in "countable" assets.  This figure changes each
year to reflect inflation, and the 2007 figure has not yet been published. 

All assets are counted against these limits unless the assets fall
within the short list of "noncountable" assets. These include:

1. personal possessions, such as clothing, furniture, and jewelry;
2. one motor vehicle;
3. the applicant’s principal residence, together with all adjoining real estate, up to $500,000 equity;
4. prepaid funeral plans and a small amount of life insurance; and
5. Assets that are considered "inaccessible" for one reason or another.

The Home

Nursing home residents do not have to sell their homes in order to
qualify for Medicaid, as long as the nursing home resident intends to
return home. Additionally, the house may be kept if the Medicaid
applicant’s spouse or another dependent relative lives there.

Protections for the Healthy Spouse

The Medicaid law provides special protections for the spouse of a
nursing home resident to make sure she has the minimum support needed
to continue to live in the community.

The so-called "spousal impoverishment protections" work this way: if
the Medicaid applicant is married, the countable assets of both the
community spouse and the institutionalized spouse are totaled as of the
date of "institutionalization."

In general, the community spouse may keep all of the couple’s total
"countable" assets up to a maximum of $99,540 (in 2006). Called the
"community spouse resource allowance," this is the most that a state
may allow a community spouse to retain without a hearing or a court
order. Additionally, the at-home spouse may obtain a court order or
hearing to increase this amount.

In all circumstances, the income of the community spouse will
continue undisturbed; he or she will not have to use his or her income
to support the nursing home spouse receiving Medicaid benefits. But
what if most of the couple’s income is in the name of the
institutionalized spouse, and the community spouse’s income is not
enough to live on? In such cases, the community spouse is entitled to
some or all of the monthly income of the institutionalized spouse. This
figure, known as the minimum monthly maintenance needs allowance or
MMMNA. In Mississippi, the MMMNA is allowance is up to $2,488.50 (for
2006) per month. If the community spouse’s own income falls below his
or her MMMNA, the shortfall is made up from the nursing home spouse’s
income.

In exceptional circumstances, community spouses may seek an increase
in their MMMNAs either by appealing to the state Medicaid agency or by
obtaining a court order of spousal support. To do so, you should
consult an Elder Law attorney, prior to making any transfers and prior
to filing a Medicaid application.

Example:

Mrs. Henderson’s husband moves to a nursing home. Prior to his
illness, the Hendersons have been living on his income of $2,300 a
month, Mrs. Henderson’s income of $400 a month and income from their
investments, which total $220,100. On applying for Medicaid to cover
her husband’s nursing home care, the state Medicaid agency informs Mrs.
Henderson that her MMMNA is $2,488.50 and that the Hendersons must spend
down their savings to $103,640 — $4,000 for Mr. Henderson and $99,640
for Mrs. Henderson. Once they have spent down to $103,640, Mrs.
Henderson will be entitled to $2,088.50 of her husband’s monthly income in
order to make up the difference between her own income of $400 a month
and her MMMNA of $2,488.50.

Mrs. Henderson decides to appeal this determination, arguing that
she would prefer to keep enough funds invested to generate the
difference between her income and her MMMNA rather than receive $2,088.50
a month from her husband. On appeal, the hearing officer estimates that
she should receive $200 a month from her standard $99,640 resource
allowance, bringing her income up to $600 a month and her shortfall
down to $1,888.50 a month. To generate $1,000 a month at an interest rate
of 6 percent, Mrs. Henderson would have to have $200,000 invested.
Since $200,000 plus $95,100 exceeds Mr. and Mrs. Henderson’s savings of
$220,100, Mr. Henderson is determined to be eligible for Medicaid.

If you believe you are a good candidate for seeking an increase in either the Community Spouse Resource Allowance or the Minimum Monthly Needs Allowance, you should contact an elder law attorney to explore such options before making any application for Medicaid benefits.  Choices you make in the Medicaid application could forestall your ability to later seek this benefit, or limit who hears your request. 

Morton Law Firm practices elder law throughout the state of Mississippi and will be happy to discuss your case.   Please call for an appointment.