The Scoop on Spousal Impoverishment
No one wants to be impoverished. But when it comes to Medicaid planning, being impoverished actually provides benefits. Most seniors contemplating admission to a Florida nursing home may have been alerted of this strange fact. But what exactly does impoverished mean in this context? Medicaid rules are difficult to follow, and, as such, we have provided a short guideline to help you prepare for your future.
Spousal Impoverishment
When a person goes to a nursing home, the costs can be devastating for the whole family. Room charges alone can run upwards of $10,000 per month in some areas of the country. Even in lower-income areas, charges can be around $6,000 to $8,000 per month. Retirement funds are decimated; savings are spent in a matter of months. This is especially troubling for married people.
Medicaid does not want married people to lose all their money just because a spouse must move to a nursing home. While Medicaid does require the recipient of public aid to be technically “impoverished” to the point of having less than $2,000 worth of non- exempt resources, the program does not expect the spouse still living in the community to become impoverished as well. This allows an exception that can protect a large portion of a family’s estate.
Community Spouse
Say a husband is 10 years older than his wife and in far worse health. Certainly the family would hope that the couple’s lifetime savings could pass to her upon the husband’s death, so that she could continue to live comfortably into her later years. This is where the community spouse doctrine comes in. Medicaid regulations permit the spouse living in the community – the one who is not in the nursing home – to keep a certain portion of his or her income, within designated limits. These change slightly every year, but in 2014 it was at least $1,939 but not exceeding $2,931 per month.
To illustrate, say a couple recently retired to central Florida and has a modest income. The wife has income of $500 per month from all sources, and her husband receives $2,000 from all sources. Provided the husband has already met Medicaid eligibility guidelines, his income could be set aside to pay for his wife’s expenses. In this example, she would then receive $2,500 per month, well within the guidelines.
The Take-Away
Medicaid rules are often complex because even when applied as clearly and simply as in the example above, there can still be a host of exceptions that depend on each couple’s unique circumstances. The type of income, the source, and even how the money is used can each play into Medicaid’s determinations of eligibility. If even the smallest exception is overlooked, it can cost a family dearly. Anyone planning for nursing home care should consult a central Florida elder law attorney at the Millhorn Elder Law Planning Group to discuss how to best take advantage of Medicaid rules like the community spouse doctrine.