When one spouse needs long term care, it often spells disaster for the other spouse. In addition to the inevitable emotional loss, the couple is suddenly faced with additional bills of $2,000 to $4,000 per month. No wonder that 78% of Texas nursing home residents are on Medicaid-90% of whom became impoverished and qualified for Medicaid in less than 26 weeks!
Until about eight years ago, all the assets and income of both spouses were counted by the Medicaid program. Therefore, neither spouse could qualify until both were impoverished. As a result, people who had been married for 50 years-and who loved each other-were forced to go to the Travis County Courthouse to get a divorce, to protect the one left at home.
Fortunately, federal protections against such "spousal impoverishment" now make such tragedies unnecessary-provided you know the complicated rules for obtaining those protections. Here is a very brief summary of those rules.
First, the "community spouse" is entitled to keep a "protected resource amount." The starting point is to subtract from all the couple's property (both community and separate) certain exempt property including the residence, household goods, personal goods, one car, and certain funeral and burial arrangements. The non-exempt property is valued as of the first day of the first month one spouse is in a nursing home. The "protected resource amount" is one-half of the total value of the non-exempt property, provided it cannot (in 1998) be less than $16,152 nor more than $80,760.
Take for example a couple with $100,000 in countable assets, who will be allowed a "protected resource amount" of $50,000. The one who needs Medicaid can become eligible as early as the first day of the second month in the nursing home by "spending down" $50,000 in one or more of the following ways:
Alternatively, if total combined incomes of both spouses are less than the "spousal needs allowance" discussed below, they may request an increased "protected resource amount" to provide income needed by the community spouse.
In addition, the community spouse is allowed to keep a limited amount of countable income, known as a "spousal needs allowance." In 1998, the maximum amount is $2019.00 per month. If the combined countable incomes of both spouses (after certain deductions) exceed the "spousal needs allowance," the excess amount (to the extent it consists of income of the spouse in the nursing home) must be paid to the Medicaid program; provided, the community spouse can keep all income coming in her or his name, without limit. Here are some ways the community spouse's income can be protected:
Although these protections are most often applied when one spouse needs nursing home care, they are also available (to some extent) for those needing home care under the new Community Based Alternatives program.
The difficulties of the one left at home are great enough without adding preventable financial distress. For more information on preventing "spousal impoverishment," contact the Legal Hotline for Older Texans, the Texas Department of Human Services, Family Eldercare, a private Geriatric Care Manager, or an Elder Law Attorney.