Medicaid Will Take My House and Other Misconceptions for Spouses
By Paul Mitchell, CELA, East Denver LIVING WELL Magazine
Many of my clients are wives of the recipients of Medicaid. They have heard from their friends and social workers that Medicaid will take their house from them, that they must live on their own income without the support of their husbands and that they face bankruptcy because of the cost of their husbands’ care.
Medicaid is a Source of Payment for Health Care
Medicaid is a payment source for nursing home services. After the single recipient makes his or her “patient payment,” Medicaid pays the balance of the cost of care to the nursing home.
Meeting the Requirements for Medicaid
To qualify for Medicaid an individual needs to meet the requirements to be medically and financially eligible and reside at a place in which Medicaid coverage is available. The program can provide services at home, at an assisted living facility or a nursing home. If the applicant, or his or her spouse, has made gifts (transfers without fair consideration) in the five years before the application, then Medicaid workers will delay Medicaid payments in proportion to the value of the gifts.
Income Maximum
The maximum gross income for the Denver Metro area is $6,914.00. The applicant may have no more than $6,914 per month in the Denver Metro area in 2011. If an applicant has more than a gross income of $2,022 per month, then he or she creates an income trust that is easy to do. Consequently, the maximum income is not $2,022 of gross income.
Supplemental Income for the At-Home Spouse
The Medicaid case manager determines the wife’s allowance for income. The allowance minimum is $1,838.75 and the maximum is $2,739 and is enhanced based on rental or mortgage expenses, taxes and insurance on the home, condominium fees, medical expenses, health insurance premiums, long-term care insurance premiums, medication expenses, etc. For example, if the allowance for the wife is $2,000 and her income is $500, then she needs $1,500 more to receive a total of $2,000. She may share in her husband’s income to get $1,500, to the extent that his income is sufficient.
Resources: They will take my home
The couple’s assets or resources are pooled together. Certain assets are not counted. If a spouse lives in the recipient’s home, then home is not counted. If an unmarried recipient does not live in the home and signs an intent to return home, then the home (residence) is also not counted.
Among the other assets that are not counted are one car, personal property, an irrevocable burial plan, small life insurance policies, and single premium immediate Medicaid compliant annuities.
Medicaid counts all other assets. Most of the elderly own deferred annuities; these are valued at the cash value. Medicaid counts IRAs but after a 20% discount for taxes. The cash value of life insurance policies is counted in most cases.
Maximum for Resources
Of the counted assets, the Medicaid recipient is entitled to $2,000, the spouse at home, $109,560: a total of $111,560.
The Spouse’s Rights
First the spouse may receive a supplement from his/her spouse to his or her income based on his or her needs.
Secondly, the surviving spouse at home may keep the home free from any attempt by the state to recover its medical expenses for the Medicaid recipient.
Thirdly, between the spouses, they may keep up to a maximum of $111,560 besides the home and other exempt assets.
(This article is an overview of certain aspects of Medicaid and therefore is not complete. It is for educational purposes only.)
Paul Mitchell, CELA (certified elder law attorney), has an office at 3300 S. Parker Road, Suite 215, Aurora, CO 80014, 303-338-9800.
