We’ve previously discussed the basic Medical Assistance rules in Minnesota. If you missed that blog post, you can read it here.
Beyond the basics are spousal impoverishment rules. As we previously mentioned in order to qualify for Medical Assistance the individual entering the skilled nursing facility can only have $3,000.00 in assets and is only allowed to keep $102.00 per month in income, known as their personal needs allowance. But what about their spouse? How much do they get to keep in assets and income?
The spousal improvement rules were enacted to protect married individuals from becoming improvised when their spouse needs long-term care. These rules apply when one spouse is in a skilled nursing facility receiving Medical Assistance and the other spouse is living in the community. The spouse in the skilled nursing facility is often referred to as the institutionalized spouse and the spouse living at home is generally referred to as the community spouse.
When a married individual applies for Medical Assistance, they also need to complete an Asset Assessment, to determine how to allocate their income and assets among spouses. The assessment evaluates all assets owned by the couple, whether owned individually or jointly.
The community spouse asset allowance for 2019 is $126,420.00. This allowance is increased each year. If the married couples’ assets are less than $129,420.00 (the community spouse asset allowance plus the $3,000.00 excluded asset limit for the institutionalized spouse), then the community spouse will be able to keep all the couple’s assets.
If the couple has more than $129,420.00 in non-excluded assets, then they will have to do a spenddown in order to reduce their assets to the above amount. Assets held both individually and jointly among spouses are counted toward the total asset limit. The combined assets of a married couple are considered available assets unless one of the excluded asset categories applies.
However, once the institutionalized spouse is determined eligible for Medical Assistance, none of the assets of the community spouse are considered available to the institutionalized spouse. After Medical Assistance is approved there is no limit on the assets the community spouse can own or acquire unless there is a break in institutionalization for more than 30 days. The institutionalized spouse is also permitted to transfer assets or income to the community spouse at any time without being penalized.
The institutionalized spouse can only keep $102.00 in income each month but there are specific rules to determine the income allowance of the community spouse. These rules are based on minimums and maximums.
The minimum amount of income the community spouse can have in 2019 is $2,058.00 and the maximum is $3,160.50. In order to calculate the exact income allowance, a calculation is done based on the community spouse’s shelter expenses (i.e. rent, mortgage, insurance, taxes and required maintenance charges for cooperative or condominium). A basic shelter allowance and utility allowance are factored into the equation to determine the monthly income allowance for the community spouse.
In the event the community spouse’s gross monthly income falls short of the maximum amount, the community spouse’s income can be supplemented by the income of the institutionalized spouse. If the additional income from the institutionalized spouse still creates a shortfall, the community spouse can keep additional income-earning assets over the $126,420.00 asset limit for 2019.
Planning for long-term care is already difficult enough but for married couples it creates additional challenges and obstacles. There are many rules and calculating income and asset allowances can be difficult. If you’re in the process of planning for long-term care and need help tackling these complex issues, our attorneys are here to help. Contact our office or book an appointment online to schedule an initial consult.