Medicaid: Custodial Care: Permitted Spousal Income Modifications
Medicaid includes provisions for a non-institutionalized spouse's income not to be counted for purposes of determining eligibility
Medicaid also provides relief if the person who requires custodial care receives income that both a husband and wife live on.
Community Spiouse's Income
- For purposes other than custodial care, a spouse's income is added together with the income of the person in need of medical care.
- However, when one member of a married couple is institutionalized (remember "institutionalized" means receiving long term care whether it's in a nursing home or at home through a home health agency) and the other, we'll call him/her the "community spouse," remains in the family home, they are not treated as a couple but as two single individuals. The community spouse's income is generally ignored.
- Income of the community spouse is determined by a rule titled the "Name on the check" rule: if a check is issued to the community spouse it is ignored for Medicaid eligibility purposes. This is true regardless of whether you live in a community property state or not.
In all states, Medicaid provides relief if the person who requires custodial care receives income that both husband and wife live on.
If the patient receiving custodial care receives an income, following the "Name on the Check" rule, all checks issued to the name of the patient are assumed to belong to that person. However, the rules permit allowing a portion of that income to not be counted as the patient's income. Instead the patient is permitted to give a part of the income to the spouse for his/her maintenance. This amount is set annually and is called the Minimum Monthly Maintenance Needs Allowance (MMMNA).
- Each state sets its own amount for MMMNA. To determine the MMMNA for your state, see Medicaid: State Chart.
- MMMNA amounts can be higher than those specified based on exceptional circumstances resulting in significant financial distress.
- In all states, an individual can obtain a court order allowing a higher amount when justified. For example, a woman whose husband receives custodial care may show a court that the expenses of maintaining their home requires a maintenance level higher than that prescribed by the state. She could be permitted to keep a higher portion of her husband's pension check.
- Requesting a court order in this situation is not a major undertaking but will require hiring an experienced attorney. (To find an elder law attorney, see:www.naela.org
- Any income of the healthy spouse is used to offset the Minimum Monthly Maintenance Needs Allowance.
- For example, if the MMMNA is $2,000 a month, and the healthy spouse earns $1,200 a month, only $800 of the patient's income can be deducted as MMMNA to determine eligibility for Medicaid long term care coverage for that month.
- While MMMNA applies in all states, in those states with Medically Needy provisions with Income Caps, there are more rules worth noting.
- MMMNA is only applied after the patient has qualified for Medicaid. Once the patient qualifies, MMMNA comes into play to determine the amount of income that must be paid to the nursing home.
The Patient's Income '" Minimum Monthly Maintenance Needs Allowance (MMMNA)
- To see how MMMNA works: Let's say Harold is in a nursing home. He receives a pension and Social Security totaling $3,000 a month. Harold's wife, Maude, has a small pension which brings her $703 per month. Assuming they are New York residents, Harold may give Maude $1,400 per month ($2,103 MMMNA amount less Maude's pension of $703) for her maintenance. The $1,400 won't be counted as Harold's income, putting his income at $1,600 per month. ($3,000 less $1,400.) He may even be allowed to give Maude more than $1,400 and not have it count as his income if he can show that otherwise there would be a financial hardship on her ability to stay in their home.
- Since New York is a state with "medically needy" provisions, and given the high cost of nursing home care, $1,600 per month will be low enough to make Harold eligible for Medicaid based on income. Remember: of the $1,600 that remains as Harold's income, all but a small amount must be paid to the nursing home, so it is in their interest to have as much of his income assigned to Maude as possible.
Family Member Allowance
Family Member Allowance is another deduction which can be made in all states before determining whether income meets eligibility standards.
- The amount of the Family Member Allowance is determined by each state and is based on the MMMNA amount.
- The amount is deducted for each family member living with the healthy spouse.
- A family member may be a minor child, a dependent child, dependent parent, or dependent sibling of the patient.
- The deduction works the same as MMMNA
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