Understanding Medicaid’s Protections Against Spousal Impoverishment

Providing for the long-term care of yourself or a loved one can be a difficult reality. Requiring long-term care marks the end of a person’s independence and their ability to adequately care for themselves which can be a harsh reality, no matter what the cause. And of course anything that brings about the need for long-term care, whether it be age, accident, or disease, will have accompanying problems associated with it outside of the simple need to acquire adequate long-term care.

If you’re talking about a parent or a spouse, securing long-term care may also come with guilt that you’re not (or no longer) able to adequately care for them yourself. And as if the emotional costs of entering into a long-term care situation weren’t enough, there are major financial considerations as well.

The high cost of adequate long-term care means this personal challenge can also become a major financial challenge. Fortunately, Medicaid coverage can provide for a long-term care solution for many of those most-in-need, but there are limitations and sometimes unwanted side effects of obtaining this coverage.

With Medicaid, there are financial eligibility requirements for receiving these benefits. Without proper planning, a patient may have to exhaust most of their own financial resources before they become eligible to qualify for Medicaid coverage. In most cases, however, only one spouse will have need for Medicaid benefits at a time. So will the healthy spouse also have to exhaust most of their financial resources in order for their unhealthy spouse to obtain Medicaid coverage? Fortunately, there are protections in place to help prevent spousal impoverishment.

Essentially these protections allow the spouse in need to qualify for Medicaid and get the long-term care he/she needs, while the other spouse can maintain a normal lifestyle, free from the need to impoverish themselves in order to ensure their spouse can maintain their Medicaid coverage. The spouse in need can meet Medicaid’s restrictive income and resources tests to get the long-term care they need, while the “Community Spouse,” as their partner is considered under this provision, can maintain much of their assets and income without fear of interrupting their spouse’s Medicaid coverage.

One specific provision in this slew of guidance is called the Community Spouse Resource Allowance. Designed to prevent the healthy or “Community Spouse” from impoverishing themselves just so they can qualify their spouse for receive benefits, this allowance can allow the spouse in need of care to qualify for Medicaid, while the “healthy” spouse isn’t subjected to the low income/low asset requirements usually put in place for Medicaid eligibility.

For 2016, the Community Spouse Resource Allowance is set at $119,220. Depending on how high the Community Spouse’s own personal income is, some of the income of the spouse in need of long-term care can actually be set aside for the Community Spouse.

ProActive Legal Care has helped numerous clients utilize this provision to protect their assets. With our help our clients have been able to ensure quality of life for the healthy spouse and even maintain a financial bequest for the couple’s heirs.   

Effective Medicaid planning can help you navigate this complex system to extract the benefits you deserve and ensure the quality of life you’ve worked so hard to achieve. If you’re facing a challenge around Medicaid and long-term care, contact ProActive Legal Care Law Office today for a consultation. We know Medicaid and we know the law. We can help you protect what’s yours while getting needed care for those you love.

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