MedicaidEligibility Planning

Transcription

1 MedicaidEligibility Planning FamilyAssets htp:/

2 Community Spouse Resource Allowance Table of Contents: 1. Introduction 2. How Does It Work? 3. Who Is It For? 4. How do I maximize my spouse's CSRA? Introduction If you are married and applying for Medicaid, your eligibility is determined in part by your and your spouse's "countable assets," broadly defined as anything that could potentially be used to pay for medical care (for example, money in your savings account). These assets must be below a certain threshold in order for you to qualify for Medicaid. However, both you and your spouse are entitled to keep a certain amount of these assets, protecting them from Medicaid consideration. As the spouse applying for Medicaid (the "Institutionalized Spouse"), you are entitled to hold $2,000 in countable assets. As the "Community Spouse" (the spouse not applying for Medicaid), your husband or wife is entitled to hold an amount that varies by state, called the "Community Spouse Resource Allowance." The Community Spouse Resource Allowance, or "CSRA," is the amount of countable assets your spouse is allowed to hold without disqualifying you from Medicaid. For Medicaid eligibility purposes, all assets held by you or your spouse or jointly are considered, regardless of the name in which they're held or any prenuptial or postnuptial agreements.

3 In other words, to qualify for Medicaid, you and your spouse's total countable assets must be less than the CSRA (your spouse's maximum) plus $2,000 (your maximum). How does it work? Your CSRA is determined by both federal and state rules. The federal government sets a nationwide maximum CSRA ($120,900 in 2017 but updated annually) which states can't exceed. So, for you to qualify for Medicaid, your spouse's countable assets can never be higher than this amount. However, that maximum may be lower still, depending on your state of residence. A Medicaid expert can advise about your specific state and circumstances, but general information can be found below. Your state will calculate your CSRA in one of two ways: 100% States If your state is a "100% state," your spouse can keep 100% of your combined countable assets up to the federal maximum ($120,900 in 2017). So if you and your spouse have a total of $100,000 in countable assets (bank accounts, stocks, etc.) at the time of your Medicaid application, then you are within the CSRA limit and are already eligible for Medicaid (assuming you otherwise qualify). But if you and your spouse have a total of $150,000 in countable assets, you would need to spend or otherwise convert the "excess assets" (the amount over the maximum allowed) before becoming eligible. In this example, your excess assets would be $27,100, because: $150,000 in total countable assets - $2,000 allowed for you - $120,900 allowed for your spouse = $27, % States

4 If your state is a "50% state," your spouse can keep 50% of your combined countable assets up to the federal maximum. If you and your spouse have a total of $100,000 in countable assets when entering the nursing home, you can keep $52,000 of the assets, because your spouse is allowed $50,000 (50% of $100,000) and you are allowed $2,000. So and your spouse must spend or otherwise convert the excess $48,000 in order to qualify for Medicaid ($100,000 - $52,000 = $48,000). If you and your spouse's total countable assets are $300,000, then you can keep only $122,900 and must spend or convert the remaining amount before qualifying for Medicaid. Why? Because 50% of $300,000 is $150,000, which is more than the maximum CSRA of $120,900. So you can keep the $120,900 for your spouse's CSRA plus $2,000 for yourself, or $122,900. The remaining $177,100 ($300,000 - $122,900) must be spent or converted in order to be eligible. However, every "50% state" also has a minimum CSRA, which must be at or higher than the federal minimum CSRA ($24,180 in 2017). This means that if your and your spouse's combined countable assets are less than $24,180, then you can keep 100% of those assets regardless of your state's 50% rule. Additionally, some states have their own minimum CSRA which is higher than the federal minimum. So if you live in a 50% state with a minimum CSRA is $75,000, and your and your spouse's total countable assets are less than $75,000, you can keep 100% of those assets. Note that, unlike the "100% states," which look at the assets you hold as of your Medicaid application date, the "50% states" look at a "snapshot" of your assets when you enter the nursing home. So if you enter a nursing home on January 1st and apply for Medicaid on July 1st, a 100% state will look at your assets as of July 1st but a 50% state will look at your assets as of January 1st. Additionally, some 50% states include a "second snapshot" provision which looks at both the asset amounts when entering the nursing home and when applying for Medicaid. A Medicaid expert can explain which of these applies to you. Again, it doesn't matter whether the assets are held in your or your spouse's name. For Medicaid eligibility purposes, they are considered jointly.

5 Note that, while annual redeterminations are made of the Institutionalized Spouse's income and assets, the spouse's CSRA does not change after the month it was established. Who is it for? The CSRA is an important consideration whenever one spouse is entering a nursing home and applying for Medicaid, while the other remains outside institutionalized care (or at least is not seeking Medicaid). If both spouses are applying for Medicaid, the CSRA does not apply. As of 2017, 36 states (and Washington, D.C.) fall under the "50%" provision, while the remaining 14 states are "100% states." You can find updated information on your state here. Additional information can be provided by a Medicaid expert. How do I maximize my spouse's CSRA? Attaining the best possible CSRA requires a careful analysis of the assets and income of both you and your spouse, as well as the evolving federal and state rules and calculations governing CSRAs and related figures. Professional advice from a Medicaid expert is essential. One way a Medicaid expert can help you increase your spouse's CSRA is by converting non-countable assets to countable, a technique of attaining the highest possible CSRA by increasing countable assets prior to the "snapshot" date. This would only be of overall financial benefit in certain circumstances, and must be determined carefully, as an increase in countable assets may make the Medicaid applicant ineligible. If you and your Medicaid expert have done the CSRA calculations and believe the CSRA is too low for your Community Spouse to meet his or her needs, you may attempt an increase through a Fair Hearing or Court Order. An increase would be feasible especially if you can show that the Community Spouse's income is lower

6 than your state's established "Minimum Monthly Maintenance Needs Allowance (MMMNA)," requiring additional assets to support him or her. Additionally, there is a unique gray area in the situation where both spouses enter a nursing home, but only one is applying for Medicaid. Since both are in a nursing home, there is no "Community Spouse" and therefore (1) the CSRA does not apply and (2) only the assets of the Medicaid applicant would be considered countable. Therefore, a solution would be to simply transfer all of those assets to the nonapplicant spouse, thereby sheltering them from Medicaid consideration. While transferring assets generally incurs a "penalty period" (a number of months you must wait before receiving Medicaid), transfers between spouses are exempt from penalty. So, in theory, this means that one spouse could begin collecting Medicaid immediately, while the other retains all the couple's assets. However, since this is an unusual situation, there is not much precedence to the strategy and it may be challenged. Again, a Medicaid expert can advise. Last Updated January 09, 2017 Any Questions? Please call us (888) or wes@familyassets.com or james@familyassets.com View this on the web