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Introduction
The Medical Assistance program, also known as "MA," "Title 19," and "Medicaid," is a federal/state welfare program that provides health insurance to individuals with low-income and low assets who are either over 65, blind or disabled as well as families with dependent children. It provides more comprehensive health care benefits than Medicare, so for low-income elderly, it is an important program that fills in many of Medicare's gaps. In addition, unlike Medicare which has an extremely limited benefit for nursing home and home health care, Medical Assistance has a much more comprehensive benefit for nursing home care and also has significant home and community-based care benefits. Given the high cost of long-term care, even individuals who enter a long-term care facility with their own assets often end up turning to Medical Assistance after they have exhausted their own assets. This document explains eligibility for Medical Assistance when one spouse enters a nursing home (or receives long-term care in the community) and the impact on the other spouse.General Rules
ASSETS: Since 1989, the Medical Assistance program has had protections against the impoverishment of the community spouse when the other spouse enters a nursing home or receives certain Medical Assistance benefits for long-term care in the community. For admissions in 1996, the spouse "at home" may keep the greater amount of assets of:(1) $50,000; or(2) one-half of the couple's combined non-exempt assets at time of admission, up to a maximum of $76,740.
These figures are in addition to the home the spouse is living in, a car, certain pre-paid burial items, a $1,500 face value life insurance policy and home furnishings, clothing, etc. This means that, for example, for a couple with combined non-exempt assets of $80,000, the spouse at home will keep $50,000. If the couple has $120,000, the spouse at home will keep $60,000 and if the couple has $200,000, the spouse at home will keep $76,740. Assets above this amount must be "spent down" by the couple, by paying off old bills, home mortgage, taxes, the monthly nursing home bill, exempt burial assets, the life insurance and any other living expenses of either spouse.
INCOME: On the income side, the spouse at home may keep all income that comes to "her" in her own name. If that amount is less than $1,727 per month, however, the spouse in the nursing home may allocate some of "his" income to the spouse at home to bring his spouse at home's income up to the $1,727 per month amount. For example, if the spouse at home has $1,000 in her own name, and spouse in the nursing home has $1,840 in his name, the use in the nursing home first keeps $40 as his "personal needs allowance." That brings his income down to $1,800. He may then give $727 to his spouse at home to bring her income up to $1,727. (The $1,000 she receives in her own name, PLUS the $727 from him totals $1,727.) He has $1,073 remaining ($1,800 - $727 = $1,073.) This money gets paid over to the nursing home with the state paying the balance towards his nursing home bill. If the spouse at home has more than $1,727, "she" will not be entitled to an allocation from her spouse, but may simply keep all of this income, unless her county secures a court order to force her to pay some of her income towards her husband's care costs.
SPECIAL ADDITIONAL PROTECTIONS: The above descriptions are the "general rules" and the law's basic provisions. There are also special procedures for increasing the asset allocation for the spouse at home and for increasing the income limit for the spouse at home. To increase the assets for the spouse at home to a level higher than the formula would otherwise provide, the spouse must be prepared to go through an "administrative hearing" conducted by a state hearing examiner. These are informal hearings, with no strict rules of evidence and no "adversary attorneys." Individuals can be represented (or accompanied) by benefit specialists, family members or friends, as well as attorneys.
To qualify for an increase, the spouse at home must prove that the amount of interest she would get from her assets, when combined with other income, is still below $1,727. If this is true, by law the hearing examiner MUST increase the amount of assets she receives so that they will generate enough income to make her income closer to the $1,727.
Examples
EXAMPLE #1: Sam and Janet have combined liquid assets of $75,000; it earns annual interest of 7%. Sam goes into a nursing home. Janet has Social Security income of $400; Sam of $800. According to the 1996 formula, Janet is entitled to $50,000, which, at 7%, generates annual interest of $3,500 per year, or $292 per month. Janet's monthly income, for purposes of evaluating whether more than $50,000 may be protected is $1,452:
$ 400 - Janet's Social Security income $ 292 - interest income of 1/12 of 7% of $50,000 + $ 760 - Sam's potential payment to Janet ($800 - $40 personal needs allowance) ----- $1452 - Janet's Total IncomeJanet's income is below the minimum monthly maintenance needs allowance by $275 ($1,727 limit - $1,452). At 7% income, the couple's additional $25,000 in assets ($75,000 - $50,000) generates only an additional $1,750 per year, or $146 in monthly income. Thus, even if all the couple's assets were protected, Janet's income would be only $1,598, still $129 below the minimum monthly maintenance needs allowance. A hearing examiner presented with these facts would be required to set a community spouse resource allowance of $75,000 for this couple. Sam would immediately be considered eligible for MA and Janet could keep all of the couple's liquid assets.
There are two bases for increasing the monthly income limit above the $1,727. The first is where a spouse at home has "excess shelter expenses" defined as: rent or mortgage principal and interest; property taxes; home or apartment insurance; any required maintenance charge (e.g., for a condominium) and standard monthly utility allowances. The formula is as follows: Total of Shelter Expenses - $518.00 = Amount to be added to $1,727. The MAXIMUM PERMITTED IS $1,918.50. Thus, the most the income limit can be increased by this procedure is $191.50, which is $1,918.50 - $1,727.
EXAMPLE #2: Mrs. Ward has monthly income in her own name of $1,730. She has a mortgage payment of $300 per month, a pro-rated property tax obligation of $115 per month, a pro-rated insurance obligation of $16.00 per month and pays all of her utilities. Thus, she is entitled to a $187 utility allowance. Her monthly shelter costs total $618.00. Therefore, her excess shelter costs (the difference between $618.00 and $518.00) are $100. As a result her monthly allowance can be increased by $100 to $1,827.
NOTE: A spouse may pursue this method of increasing his/her income simply by presenting appropriate information to the economic support worker. A fair hearing is not required.
Exceptional Circumstances
The other method of increasing the monthly income limit is where the spouse at home has "exceptional circumstances resulting in financial duress." Like the method of increasing the asset allocation, this can only be awarded by a hearing examiner, through the administrative law fair hearing process. A local county economic support worker has no discretion to authorize this. The standard for these "exceptional circumstances" is defined in Wisconsin law as "situations that result in the community spouse not being able to provide for his or her own necessary and basic maintenance needs."
The Hearing Examiner has total discretion as to which expenses of a community spouse meet "necessary and basic maintenance needs." (For example, contributions to church and other expenses have been disallowed by hearing examiners. Insurance, over-the-counter medications and high travel costs to visit institutionalized family members have been allowed. Cable TV bills have gone both ways.) Expenses submitted for consideration to the hearing Examiner should be specific, clearly organized and documented for the Hearing Examiner's review. Then, once established by the fair hearing, the county agency must use the amount determined by the hearing officer in place of the $1,727. Thus, theoretically, there is no limit to how high the monthly income limit can be using this procedure.
For more information or for assistance in any issues related to Medical Assistance and spousal impoverishment, contact the benefit specialist in your county aging unit.
Last updated: August 12, 1997
By: Gail Schwersenska