Medicaid law was amended in 1988 in response to evidence that at-home spouses [also known as “community spouses”] faced poverty and a radical reduction in their standard of living before their spouses living in a nursing home could qualify for Medicaid. The Medicaid “spousal impoverishment” provisions were put into place to protect the community spouse when the institutional stay of the nursing home resident has lasted or is expected to last at least 30 consecutive days.
Federal law prescribes income protection of a minimum maintenance needs allowance (MMNA) for the community spouse. Federal law prescribes that the MMNA should equal at least 150% of the federal poverty level for a couple and be adjusted every year by the general rate of inflation [The Pennsylvania MMNA is adjusted on July 1st of each year].
The community spouse keeps all of his or her own income plus half of any shared income. If this total is less than the MMNA, then the institutionalized spouse must be allowed to supplement the community spouse’s income in an amount that increases the community spouse’s total income up to the applicable MMNA. If the income level of the community spouse is very low, he or she may receive all of the combined marital income.
Example: Mr. and Mrs. Smith have a joint income of $3,000 a month, $1,700 of which is in Mr. Smith's name and $700 is in Mrs. Smith's name. Mr. Smith enters a nursing home and applies for Medicaid. The Medicaid agency determines that Mrs. Smith's MMMNA is $2,000 (based on her housing costs). Since Mrs. Smith's own income is only $700 a month, they may allocate $1,300 of Mr. Smith's income to her support. Since Mr. Smith also may keep a $60-a-month personal needs allowance, his obligation to pay the nursing home is only $340 a month ($1,700 - $1,300 - $60 = $340).
Conversely, a community spouse with a high total income may receive little or no supplementary income from the institutionalized spouse. In such a case, even if the income of the community spouse is considerable, the Medicaid program cannot require that any of it be applied toward the cost of the institutional spouse’s care.
Medicaid rules provide three pathways for community spouses to obtain a higher MMNA.
- First, the allowance may be raised (though only as high as the Federal maximum allowance) for community spouses who show that they have exceptional housing costs, defined as more than 30% of the standard allowance.
- Second, they can receive a larger allowance if a state Medicaid hearing finds that exceptional circumstances might otherwise cause them extreme financial hardship.
- Third, they may seek a court order for additional support.
Medicaid rules are extremely complex and confusing. We always recommend that you seek the advice of a qualified elder law attorney.
Facts and figures are from U.S. Department of Health and Human Services