In prior decades, the spouses of Medicaid nursing home recipients had to completely “impoverish” themselves – and pay nearly all their income and resources to defray expenses incurred by a spouse who was receiving long-term care. This meant that these “community spouses” – who were healthy enough to live at home – struggled to afford their mortgage, home maintenance costs, and other living expenses.
Federal Medicaid law now protects these spouses of Medicaid nursing home enrollees by allowing them to keep enough resources and income so they can afford to live in the community.
Spousal impoverishment rules allow these spouses to retain some of their assets through a Community Spouse Resource Allowance (CSRA). This means spouses no longer have to completely deplete their resources so their loved one can qualify for Medicaid.
In many states, community spouses can keep 50 percent of the couple’s assets – up to a maximum of $128,640. However, other states allow community spouses to keep up to $128,640 – even if that amount equals more than half the couple’s assets.
The CSRA is usually based on the value of a couple’s resources on the date the spouse seeking Medicaid coverage was “institutionalized” (when they entered a hospital or nursing home).
In many states, these spousal impoverishment rules used to apply only to nursing home enrollees, but the Affordable Care Act required states to allow spouses of Home and Community Based Services (HCBS) enrollees to keep a CSRA. That rule was set to expire in 2018, but was extended through November 2020.