Important Rules on Medicaid Planning for a Married Couple

Last week I presented a seminar to attorneys at the annual meeting of the Connecticut Bar Association. The topic was Medicaid Planning for a Married Couple, and since it is fresh in my mind, it is a good time to again review those rules, as they can be confusing.

First, the Department of social Services (DSS) will consider all assets owned by either spouse, or partly owned by either spouse, as a countable asset toward the allowable limit, unless the asset is exempt. Exempt assets are the family home, one car, prepaid funeral contracts, insurance policies which in total do not exceed $1,500 face value, and personal property. It does not matter if a child is on the account, as DSS will count the full value as the parent’s money.

Second, DSS then determines the value of those assets on the “Date of Institutionalization”, which is either the first day of a continuous 30 days stay between hospital and nursing home, or the date on which the DSS considers you to miss at least three activities of daily living, such as bathing yourself, dressing yourself, taking your own medication, etc.

Third, DSS then allows the healthy spouse to keep one half of the total countable assets, but not more than $113,640.

Fourth, DSS will not grant Medicaid (Title 19) until the assets are spent down to the calculated half or the maximum $113,640. This is often called the “spend down”. What can you spend down on? A partial answer is that you can buy prepaid funeral contracts if you don’t already have them, pay down credit card or mortgage debt, make needed repairs or improvements to your house, or even trade in that old clunker you have nursed through the years and buy a new car that will be more reliable. Another important rule is that the healthy spouse can buy an immediate annuity with his or her IRA assets, and that will effectively count as part of the spend down. There is a downside, however, and that is the State of Connecticut must be made the primary beneficiary if the healthy spouse dies before the sick spouse. The way this must be done is strictly enforced, so it is wise to get competent advice when following this rule.

Remember that these rules apply both for nursing home care, and for care in your own home paid for by Medicaid. It is especially critical to save every last dollar in home care situations as the limit the State pays is $5,598 per month. If you need more care that that, it must come from your own assets, or in the case of veterans who served during war time, it may also be possible to get VA Aid and Attendance benefits to contribute toward the home care.

The rules on Medicaid Planning for a Married Couple are always subject to change, so what may be true today may not be true next month or next year. When you need the care, you need to get advice that is based on the rules then in effect, not the rules when your uncle’s friend’s cousin applied for Medicaid years ago.