Medicaid Applications for Home and Community
Based Services and Nursing Home Care |
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Spousal Protection
An applicant for this benefit must visit the county department of Social Services when
his/her spouse enters a nursing home (usually within the first month) to determine the
Community Spouse Resource Allocation (CSRA). The community spouse may keep the first
$87,000 of resources and the nursing home spouse is allowed to keep $2000. Anything over
that must be spent down. The spend down period begins the date one visits the county
department of social services and applies for the CSRA, not the date of entry into the
nursing home.
A. How do you spend down?
- Pay for nursing home care
- Purchase items for the nursing home spouse
- Purchase an irrevocable burial policy
- Make home improvements such as a new roof, insulation or refrigerator
- Pay off indebtedness
- Buy a new car
- Purchase a "straight life" annuity (SLA) to generate household income or to
pay nursing home costs. An SLA must immediately begin paying monthly benefits to the
annuitant(nursing home resident). The SLA must be irrevocable with no beneficiaries. The
duration of payments may not exceed the annuitant's life expectancy as specified in
Medicaid regulations. (A Medicaid approved life expectancy table is used to determine the
amount of money the annuitant may receive.)
B. You may not spend down (transfer assets) by:
- Gifting the money to relatives or friends
(IRS allows gifts of $10,000 per year to an individual without tax consequences, but
Medicaid does not honor these gifting rules)
- Transferring title in rental property, recreational vehicles, etc. 36 months prior to
Medicaid application.
- Putting money in a trust
(trusts are subject to a look back period of 60 months)
- Life estate after July 1, 1995
(a Medicaid approved formula is used to determine fair market value based upon the
person's age)
C. Penalties for transfer of assets
Temporary noneligibility for Medicaid coverage.
This period of time is established by using a divisor of $3792 into the amount
transferred. For example if the individual transfers $4320 in cash to another, the $4320
is divided by $3792, making the individual ineligible for 1.14 months. The .14 is multiplied
by 30 days in a month, so the person is ineligible for one month and four days.
Minimum Monthly Maintenance Needs Allowance
(MMMNA) Monthly Income
The community spouse may keep a MMMNA of $1473. This can be increased to $2103 if
exceptional circumstances require more funds to run the household. The MMMNA is computed
as follows:
For a couple with a nursing home resident:
a. The first $50 goes to the nursing home spouse for personal needs
b. The next $1473 goes to the community spouse (may be increased to a maximum of $2103)
c. The balance of available income is used as patient's payment for nursing home care.
(Medicaid is billed by the nursing home for the difference between patient payment and the
nursing home's total allowable for reimbursement by Medicaid.)
For a couple with a home and community based resident:
a. The person needing assistance is allowed to keep $1590 for living expenses.
Any amount over the $1590 is required to be kept in the Medicaid Qualifying Trust and
forwarded to the State of Colorado at the time of the death of the individual.
b. The community spouse (or the well spouse) is allowed to keep a maximum of $2103.
Medicaid Qualifying Trust/ Monthly Income
If an individual living in Metro Denver has a monthly income greater than $1590 and less
than $3792 as a couple, they must set up a Medicaid Qualifying Trust. (It is not mandatory
that the trust be court approved, and Medicaid Trusts may be established without the
services of an attorney.)
Medicaid Recovery Act (Medicaid Liens)
A lien can be placed on the real property of an individual who enters a nursing home. The
state will recover Medicaid money, dollar for dollar from the sale or transfer of the
house title. Liens are placed on the property during the nursing home stay, but are not
collected until the title is transferred through sale or at the settlement of the estate.
A lien may be waived if the family can show hardship.
When is a lien not placed on the home?
- Spouse lives in the home
- Dependent child under age 21 lives in the home
- Sibling lives in the house
- Daughter or son lives in the home for two years before the deceased entered a nursing
home which allowed the parent to delay entry into a nursing home, and if the son or
daughter has continued to live in the home since the parent entered a nursing home.
- A life estate was placed on the home prior to July 1, 1995.
- The home is owned in joint tenancy with someone other than the deceased.
Eileen Doherty is the Executive Director of the Colorado Gerontological Society and
Senior Answers and Services. She has worked in the areas of policy, clinical practice, and
education in gerontology for more than 20 years. She can be reached at 303-333-3482.
