'Spousal Impoverishment' Preserves Assets from Medicaid Recovery
Deborah Van Fleet, Producer
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Monday, March 13, 2023
Seventy percent of those who reach age 65 will need long-term care services or expensive in-home nursing care, and 42% of it nationwide is paid for by Medicaid.
With long-term care costing nearly $100,000 a year in Nebraska as of 2022, assets can quickly be wiped out.
Ann Mangiameli, an attorney in Omaha, said states are required to "recover" funds Medicaid spends on in-home or out-of-home nursing care for those 55 and older, but the Spousal Impoverishment program allows the healthy spouse to preserve a portion of their assets. It includes their house, if the spouse continues to live there.
She pointed out if one member of a couple may need nursing home care, they should request a "Spousal Impoverishment" assessment through the Department of Health and Human Services, which involves dividing their total assets in half.
"And then they look at the half of the assets that goes to the spouse that's going to be considered the one needing the nursing care," Mangiameli explained. "That person needs to spend their assets down to $4,000 in Nebraska to qualify for Medicaid."
Mangiameli noted the house is not considered when totaling the couple's assets. She said once the spouse needing care qualifies for Medicaid, the house should be transferred to the name of the spouse living there, referred to as the "community spouse." If it is not done, and the community spouse dies first, the house becomes eligible for Medicaid recovery since it is considered an asset of the spouse who's receiving Medicaid.
As of 2022, the "community spouse" can keep a maximum of roughly $137,000 and a minimum of roughly $27,000. They can also keep their income up to just over $3,400 a month, with amounts adjusted annually based on inflation.
Mangiameli emphasized by delaying the Medicaid assessment until the couples' assets have further dwindled, the community spouse may qualify to keep a lower amount. She also cautioned seniors assets given away within five years of applying for Medicaid -- the current "look-back" period -- will be considered when determining total assets. Although it will not permanently disqualify a person from Medicaid, it will result in a "penalty period."
"So, let's say you gave away $100,000, and the nursing home that you're going into is $10,000, you are ineligible for a period of 10 months," Mangiameli outlined. "It's the actual cost of the facility up to whatever that amount of money is."
Mangiameli added since 2017, the state law said all assets, with or without a probated will, and including those in a trust, may be eligible for Medicaid recovery.
Nebraska's Spousal Impoverishment Program and Medicaid Recovery both include a number of exceptions and special considerations, so Mangiameli urged seniors to consult with an elder law attorney and not delay seeking a Spousal Impoverishment assessment if they anticipate needing Medicaid in the future.
"People need to know that Medicaid Recovery is a thing; that they will get letters," Mangiameli stressed. "Nebraska is required to try to get paid back for any Medicaid payments, specifically once they are in nursing homes. And families usually don't know that until they get those letters in the mail."
Source:
Public News Service
https://www.publicnewsservice.org/2023-03-13/consumer/spousal-impoverishment-preserves-assets-from-medicaid-recovery/a83457-1#
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