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 Communuity Spouse Resource Allocation (CSRA). The community spouse may keep the first $84,120 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 refridgerator
- 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 speciified 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 non eligibility for Medicaid coverage.
This period of time is established by using a divisor of $3659 into the amount transferred. For example if the individual transfers $4320 in cash to another, the $4320 is divided by $3659, making the individual ineligible for 1.18 months. The .18 is dropped so the person is ineligible for one month.

Minimum Monthly Maintenance Needs Allowance
(MMMNA) Monthly Income
The community spouse may keep a MMMNA of $1383. This can be increased to $2103 if exceptional circumstances require more funds to run the househould. The MMMNA is computed as follows:

a. The first $50 goes to the nursing home spouse for personal needs

b. The next $1383 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.)

Medicaid Qualifying Trust/ Monthly Income
If an individual living in Metro Denver has a monthly income greater than $1536 and less than $3659 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.