If you are over 65 years of age, need health care or long-term care, and…
On November 3, 2014, Medicaid issued a new General Information System GIS 14 MA/25 stating that GIS 14 MA/15 has been rescinded. GIS 14 MA/15 had been issued on January 1, 2014.
GIS 14 MA/15 provided that “spousal impoverishment with post-eligibility rules must be used when determining income and resource eligibility for married couples with a spouse receiving HCBS (Home & Community Based Services) waiver services or with a spouse enrolled in a MLTC (Managed Long Term Care) plan.” This meant that when one spouse is receiving home care services paid for by Medicaid, the option for couples to use a pooled income trust to protect their income was eliminated. While some married couples were not adversely affected, those earning more than $3,314 per month were disadvantaged by this new rule.
The most recent General Information System (GIS 14 MA/25) means that spousal impoverishment is no longer mandated for married individuals with one spouse receiving MLTC home care services or waiver services. Once again, married couples may choose to utilize pooled income trusts or spousal impoverishment, whichever is more advantageous for them.
Spousal impoverishment in a nursing home setting allows the community spouse (assume for simplicity’s sake that it is “her”) to keep the MMMNA (“Minimum Monthly Maintenance Needs Allowance”) income amount, currently $2,931, plus the cost of her health insurance, while the nursing home resident is allowed to keep $50 of “his” income plus the cost of his health insurance. If the community spouse’s income is below the MMMNA amount, then Medicaid allows her to keep as much of her institutionalized spouse’s income as necessary to bring her income up to the MMMNA amount. If the well spouse has income over the MMMNA , then she is allowed to keep up to the MMMNA amount, and must contribute 25% of her income over such amount. For example, if the well spouse has $3,931 in monthly income ($1,000 over the MMMNA), then she must contribute $250 per month (25% of $1,000) towards the care of her spouse in the nursing home.
In the home care situation, married couples with one spouse receiving MLTC home care services or waiver services can now choose either spousal impoverishment or the use of a pooled income trust for the spouse receiving services.
In choosing spousal impoverishment, the spouse receiving MLTC home care services or waiver services through Medicaid would be allowed to keep $383 per month, and would contribute additional income to the community spouse, to bring the community spouse’s income up to the current maximum of $2,931. For a married couple with a combined monthly income of $3,314 or less ($2,931 plus $383), this choice would be ideal and would remove the need for a pooled income trust.
In choosing to utilize a pooled income trust, the Medicaid recipient is allowed to keep $829 per month and deposit his income above that amount into the trust, to be used to pay monthly expenses on his behalf.
Here are two examples of how spousal impoverishment affects married couples differently:
1. Husband needs Medicaid home care services from a MLTC. Wife is retired from a part-time job. Here is where spousal impoverishment would benefit the couple.
Husband’s Income Wife’s Income
Social Security $ 1,200 Social Security $ 850
Pension 950 Pension 300
Total $ 2,150 Total $ 1,150
Less Allowance < 383>
Excess Income $ 1,767
MMMNA Allowed $ 2,931
Total Income < 1,150>
Difference $ 1,767
In this case, the husband will give his wife $1,767 to help bring her income closer to the MMMNA amount of $2,931, and receive Medicaid services.
2. Husband needs Medicaid home care services from a MLTC. Wife still works. Here is where spousal impoverishment would disadvantage the couple and they should utilize a pooled income trust for the husband.
Husband’s Income Wife’s Income
Social Security $ 2,211 Social Security $ 2,291
Less Allowance < 383> Salary 4,060
Excess Income $ 1,828 Sub-Total $ 6,351
Less MMMNA < 2,931>
Excess Income $ 3,420
25% of Excess Income = $855
$ 1,828 Husband’s Contribution
+ 855 Wife’s Contribution
$ 2,683 Total Contribution to MLTC
Alternatively, using a pooled income trust, this applicant would be able to keep $829 a month and contribute the excess income of $1,382 ($2,211 – $829) to a pooled income trust, and then spend it on his monthly expenses such as food, rent, etc., and still receive Medicaid services. The Wife would remain subject to a Medicaid claim for 25% of her excess income. So with a pooled income trust, this couple’s total contribution would be limited to a Medicaid claim for $855 (25% of the wife’s excess income), and they would save almost $2,000 per month.
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