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According to studies, more than 50% of Americans will end up in a nursing home or other long-term care facility after age 65. As we have previously discussed, long-term care is incredibly expensive. For many people, the only way to reasonably expect to afford long-term care is through government needs-based funding like Medicaid. There are a lot of elements to understand and plan ahead for if you or a loved one intend to rely on Medicaid to fund nursing home or long-term care after retirement. Learn below about the Medicaid community spouse resource allowance, an important factor to consider in family Medicaid planning, and contact a seasoned West Palm Beach Medicaid planning and elder law attorney for assistance.
In order to be eligible for Medicaid, the applicant must have both income and “countable resources” (assets) below the limits set by the Medicaid eligibility guidelines. For married applicants, eligibility is generally determined by combining the income and assets of both spouses. If the couple has too many assets, these assets must be “spent down,” meaning sold or transferred in order to reach the upper limit. Note that giving away assets (or selling assets for less than fair market value) in the five years leading up to retirement may cause additional problems, due to Florida’s lookback period. Planning for Medicaid eligibility must start much earlier, and a knowledgeable Florida Medicaid planning lawyer can help you plan for eligibility without incurring penalties.
The Medicaid eligibility requirements are designed with the understanding that the need to qualify may spring from the fact that only one spouse in a marriage requires long-term care. The asset and income limits make sense for the applicant seeking long-term care but would leave the other spouse with virtually nothing to live on. It would be inequitable to force the other spouse to become impoverished just so that the applicant spouse can qualify. Medicaid has a set of “spousal impoverishment” rules in order to avoid this problem.
Under the guidelines, if only one spouse requires long-term care, the “community” or non-applicant spouse is permitted to retain a certain amount of the couple’s joint assets that will not be counted towards the applicant’s total assets when determining eligibility. This exempt amount is known as the community spouse resource allowance (CSRA).
As of 2019, the community spouse may keep otherwise non-exempt resources owned by either or both spouses up to $126,420 in total value. If the non-applicant spouse retains more than that amount of the couple’s joint assets, then the applicant’s Medicaid eligibility will be in jeopardy.
Additionally, if the non-applicant spouse’s income is not enough to live on, they are entitled to a minimum monthly maintenance needs allowance (MMMNA) drawn from the monthly income of the applicant spouse. As of July 2019, the MMMNA is $2,113 per month, and it is set to increase in July 2020. The MMMNA applies only for institutional Medicaid, not regular Medicaid.
A skilled West Palm Beach special needs planning attorney can help you and your family plan appropriately to maximize your chances for needs-based eligibility. If you are in need of an experienced and compassionate Florida Medicaid planning and elder law attorney, contact the seasoned, dedicated, and effective West Palm Beach trust and estates attorneys Shalloway & Shalloway at 561-686-6200.