Medicaid is a combination of federal and state regulations. The answers below are based on current Massachusetts law. Please consult with a qualified elder law attorney in your state as the answers may be different.
I am married. What happens if my spouse has to go to a nursing home?
Starting in 2015, in Massachusetts, the spouse of a nursing home resident is allowed to keep $119,220.00 (2015 amount) of countable assets. In addition, the nursing home resident is allowed to keep $2,000.00. Therefore, the total amount of countable assets that a married couple may keep is $121,220.00 (2015). A married couple with assets under this amount is eligible for MassHealth without spending down assets. This amount is adjusted every year; download a current copy of the Medicaid Spousal Asset and Income Allowance and Supplemental Security Income.
A married couple with more than the allowed amount of $121,220.00 in countable assets still may be able to put in place strategies to keep additional amounts. For example, with the additional funds, it may be possible to purchase a specific type of annuity that complies with Massachusetts law. This annuity would be structured to pay a monthly income to the spouse living in the home. Depending on the size of the annuity purchase and the age of the spouse living at home, the income generated from the annuity may allow the spouse to maintain his or her lifestyle without the worry of the monthly bills. Do not purchase an annuity before consulting with a qualified elder law attorney as there are specific requirements imposed by the Commonwealth of Massachusetts.
What will happen to our home?
If a married couple owns their own home and one of the couple is living in the home, the home is NOT counted as an asset. The spouse living in the home is allowed to keep the home.
How is the nursing home paid? What will happen to our income?
The general rule is that once the nursing home resident has been qualified – meaning the state has agreed to pay the nursing home – the income of the spouse in the nursing home is paid to the facility. The state allows for certain deductions (i.e. health insurance), and a monthly allowance for personal use. The rest of the income is then paid to the nursing home.
The income of a spouse living in the home is never paid to the nursing home. Regardless of the amount, that income remains with the spouse living at home. Only the income of the actual nursing home resident is used to determine the final amount that must be paid every month.
If the spouse living at home has income under a certain amount, the state will allow income to be kept by the spouse living at home. In Massachusetts for 2014, the at home spouse is entitled to a minimum of $1,966.25 per month (as of July 1, 2014). If they do not receive this amount on their own, they make take it from the nursing home resident’s income before payment is made to the facility.
For example: Mr. Smith has to enter a nursing home.
His monthly income is $2,000.00 after the allowed deductions.
Mrs. Smith, living at home, has monthly income of $800.00.
Mrs. Smith is allowed to keep $1,166.25 of Mr. Smith’s income. ($800.00 + $1,166.25 = $1,966.25)
The balance of Mr. Smith’s income would then be paid to the nursing home.
There are circumstances that allow the spouse living at home to keep more than the minimum amount. Please consult with a qualified elder law attorney for circumstances that make this possible.
I am single. What happens if I have to go to a nursing home?
If you are single you are allowed to keep $2,000.00 of countable assets. However, amounts exceeding $2,000.00 may be able to be protected. If the single person owns a home, there may be options available on transferring the home without any penalty imposed by the state. There are also options on what to do with amounts over the allowed $2,000.00. The options available are specific to each person’s circumstances, age, health, family situation, and personal wishes. Please consult with a qualified elder law attorney who will be able to explain the options for your exact situation.
What is a countable asset?
Countable assets, as defined by Massachusetts law, include cash, retirement accounts, stocks, bonds, the cash surrender value of life insurance policies – but only if the face value is more than $1,500.00, and real estate other than the principal residence.
For most of these assets, the state does not care whose names may be on the account. If either spouse’s name is listed on the asset the total value of the asset will be countable. There are exceptions to this rule: jointly owned savings bonds and brokerage accounts are two of the exceptions For example, if there are four savings bonds, and two of them are jointly owned by a spouse and a child, only 50% of that value is countable. If the other two are jointly owned by both spouses, 100% of the value is countable.
What is a non countable asset?
A non countable asset, which will not be included in determining eligibility for MassHealth, includes the primary residence if certain people are currently living in the home. A spouse of a nursing home resident, for example, may keep the home.
What does “spend down” mean?
Spend down refers to reducing the amount of excess countable assets so that a person will qualify for MassHealth. The state will not penalize or refuse to qualify an applicant for MassHealth if excess funds were spent on things for which value was received. For example, the most common spend down is to pre-pay for a funeral. Other allowed spend downs include repairs needed for the home of a married couple, legal fees, and the purchase of things that may be needed for the nursing home resident (i.e. glasses, hearing aids).
The timing of any spend down must be carefully considered. It is important to make sure that all purchases have been completed prior to the date on which eligibility is requested.