spousal impoverishment protections

What are spousal improverishment protections?

Medicaid has a strict asset limit that applies to both spouses ($3,000, in most states) when applicants are 65 or older or are disabled. But the spouses of beneficiaries who receive Medicaid-covered nursing home or Home and Community Based Waiver Services (HCBS) frequently do not need Medicaid benefits themselves. If regular Medicaid asset limits for the aged, blind and disabled (community Medicaid) applied to these “community spouses,” they would struggle to afford living expenses and home maintenance costs.

Congress created spousal impoverishment rules in the Medicare Catastrophic Coverage Act of 1988 to protect these community spouses from financial ruin. As a result, eligibility rules for Medicaid-covered Long Term Services and Supports (LTSS) differ from other types of Medicaid benefits when only one spouse is applying. When this occurs, only the applying spouse’s income is counted. (Normally, the income of both spouses is counted when determining eligibility for Medicaid benefits – regardless of who is applying.)

Spousal impoverishment rules also allow community spouses of Medicaid LTSS recipients to keep a Minimum Monthly Maintenance Needs Allowance (MMMNA) from their Medicaid spouse’s monthly income. (Nearly all of this income would otherwise be paid to the nursing home – if that is where the Medicaid spouse is receiving care.) States set the MMMNA based on a federal minimum and maximum amount (and these respective amounts are $2,155.00 and $3,216.00 in 2020, although the minimum amount is slightly higher in Alaska and Hawaii).

Community spouses can also retain certain assets through a Community Spouse Resource Allowance (CSRA). As with the MMMNA, states choose between a federal minimum and maximum CSRA each year (and in 2020, these amounts range from $25,728 and $128,640).

Finally, community spouses can keep a housing allowance of $646.50 each month in 2020 (although this amount is higher in Alaska and Hawaii).

The spousal impoverishment rules enacted in 1988 applied only when a Medicaid spouse was in a nursing home, and not to beneficiaries receiving HCBS (although states could voluntarily apply these rules to HCBS). The Affordable Care Act addressed this disparity by making spousal impoverishment rules mandatory for recipients of HCBS through the end of 2018. That provision has since been extended (most recently through November 30, 2020 by the CARES Act).

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