As you get older, the likelihood that you (or your spouse) will need long-term care increases dramatically. The cost of that care, if you do need it, will not be cheap nor will it likely be covered by your basic health insurance coverage. Medicare won’t help cover your long-term care expenses either, leaving Medicaid as the only available source of assistance for many seniors who need long-term care. To qualify for Medicaid though, you cannot have income that exceeds the (very low) program limit nor may you own non-exempt assets valued over the (also very low) program limit. If you are forced to “spend-down” your assets in order to qualify, and you cannot have much in the way of income, where does that leave your spouse, financially speaking, if you enter a long-term care facility? Once upon a time it left a “community spouse” without income or resources. Fortunately, the Medicaid rules have addressed this issue by implementing “spousal impoverishment” rules. If you, or your spouse, need to qualify for Medicaid you should consult with a Missouri Medicaid attorney to make sure you understand the spousal impoverishment rules.
Qualifying for Medicaid
Medicaid is primarily funded by the U.S. federal government; however, it is administered by the individual states. As a result, the eligibility guidelines and available benefits differ somewhat from one state to the next. Because Medicaid is a “needs based” program though, eligibility in all states is based on an applicant’s income and “countable resources.” In the State of Missouri, eligibility for basic Medicaid as a senior requires an applicant to have income that falls below 85 percent of the Federal Poverty Level (FPL). In addition, your non-exempt assets, or “countable resources,” cannot exceed $999.99 in value ($2000 for a couple). Although certain assets, such as your home, are exempt and do not count toward your countable resources, it is easy to see how someone who has worked all of his/her life might have assets that exceed the program limit. If your assets do exceed the limit you will effectively have to rely on, and expend, those assets to cover your long-term care expenses before Medicaid will start helping.
The Medicaid “Look-Back” Rules
Transferring assets in anticipation of the need to qualify for Medicaid will not work because of Medicaid’s five year “look-back” rule. The “look-back” rule allows Medicaid to review your finances for the five-year period leading up to your application for any asset transfers. If you did transfer any assets during the look-back period, the value of that transfer will most likely be imputed back into your estate.
How Does the Need for Medicaid Impact a Community Spouse?
In summary, qualifying for Medicaid will require you to have a very low income and virtually no non-exempt assets. Since you will be living in a long-term care facility for the foreseeable future, the lack of income and assets may not be a problem for you; however, what about your spouse who will remain in the community? Must he/she suffer in order for you to qualify for Medicaid? Is it fair to leave a spouse without any resources and very little income? These were the issues that plagued the Medicaid program many years ago and that led to the implementation of the “spousal impoverishment” rules.
Missouri’s Spousal Impoverishment Rules
In Missouri, when one spouse enters a nursing home as special provision, known as a “Division of Assets, helps protect the community spouse. Although the rules can be complex, the basic concept of the Division of Assets provision is that a certain percentage (subject to a minimum and maximum dollar amount) of a couple’s assets is set aside for the community spouse. In addition, another provision in the spousal impoverishment rules permits setting aside some, or all, of your income for a community spouse if you enter a nursing home as long as your spouse’s income falls below the program limit.
If you foresee the need to qualify for Medicaid to cover nursing home costs in the near future, be sure to consult with your Missouri Medicaid attorney to ensure that you fully understand the Medicaid spousal impoverishment rules.
For more information, please download our FREE estate planning worksheet. If you have additional questions or concerns about Missouri Medicaid, contact the experienced Missouri Medicaid attorneys at Amen, Gantner & Capriano, Your Estate Matters, LLC by calling (314) 966-8077 to schedule an appointment.