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How to Prevent Spousal Impoverishment

Spousal impoverishment occurs when the high costs of aging start to negatively impact the healthy spouse’s financial situation. Couples are facing the reality of one spouse requiring long-term nursing care and their assets being drained by the cost for that care. This can result with the spousal impoverishment of the “community spouse,” the one who remains at home.

This occurs because in order for Medicaid to kick in, almost all of a couple’s assets must be spent or disposed of, which leaves very little for the community spouse. Fortunately, in 1988, Congress enacted provisions to Medicaid that help prevent spousal impoverishment. These provisions help ensure that community spouses are able to live out their lives with independence and dignity. Under the Medicaid spousal impoverishment provisions, a certain amount of the couple’s combined resources is protected for the spouse living in the community. Depending on how much of his or her own income the community spouse actually has, a certain amount of income belonging to the spouse in the institution can also be set aside for the community spouse’s use.

Community Spouse Resource Allowance

With the Community Spouse Resource Allowance, the spouse who does not require long-term care can keep an additional percentage of the couple’s assets beyond those a couple can own and still qualify for Medicaid. Each state has a different dollar figure for this allowance, but it must be equal to or lower than the maximum amount established by federal law.

The maximum amount of these assets is determined by Congress and does increase annually to reflect rising costs of living. Allowances may also be made for dependents who are living with the community spouse.

Monthly Maintenance Needs Allowance

The Minimum Monthly Maintenance Needs Allowance (MMMNA) is a spousal impoverishment rule that allows a married Medicaid nursing home applicant or HCBS Medicaid Waiver applicant to transfer a portion, or in some cases, all of their monthly income, to their non-applicant spouse. It intended for non-applicant spouses who have little to no monthly income. However, in order to receive this spousal income allowance, the community spouse’s monthly income must fall under a specified level.

Navigating Medicaid and the high costs of aging is a complex process. Let us help you make sure that you are optimizing your income and assets protection, and protecting your family. Contact us today!


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