Spousal protection is a program designed to allow a married individual to receive long term care from Health First Colorado (Medicaid) (in PACE, CDASS, HCBS or a nursing home), without requiring the spouse to divest of all income and resources for ongoing living expenses.
To get Health First Colorado services for long term care, an individual must have income less than 300% of the federal poverty level or $2,205/month and have resources less than $2,000 ($3,000 for a couple). If the individual has more than $2,205, they will need to apply for a Medicaid Qualifying Trust.
When institutionalized, individuals receive a monthly needs allowance of $81.95 and the rest of the income must be directed towards their care. Spousal protection was implemented with the realization that this would leave a spouse not in an institution unable to maintain community life. Thus in spousal protection, the spouse who is ill can still have $81.95/month for expenses, but rather than the rest of his/her income going to their care, some or all of it can be used to supplement the ‘well’ or ‘community’ spouse’s income.
When the “sick” spouse is non-institutionalized, the program works a little differently for those in assisted living, HCBS, CDASS or PACE.
When the “sick” spouse is in assisted living, the program is similar to the institutionalized spouse protocol, except the individual is allowed to keep $102 (in 2017) per month.
When the “sick” spouse lives in their own home and receives the HCBS, CDASS or PACE programs, the household is allowed to keep a minimum of $2,002 income per month up to a maximum of $3,023 including excess shelter costs over $979 (in 2017). Any income over that amount must be placed a Medicaid Qualifying Trust.
What counts as income?
The ill spouse may have income up to $2,205 a month (in 2017) to be eligible for Medicaid. This can come from wages/earnings, Social Security, Supplemental Security Income, pensions, gifts of more than $25, interest from investments, income from annuities, income from rental property, stocks, bonds and other investments. If an individual has income above this, he/she may need to establish a Medicaid Qualifying Trust.
The community spouse’s income does not matter, but any amount in excess of the spousal protection allowance of in the institutionalized spouse must be placed in a Medicaid Qualifying Trust, with the State of Colorado as the beneficiary.
Some sources of income are not counted for Medicaid purposes. Income from the Property Tax/Rent/Heat rebate; Veterans Administration aids and attendants payments; and long term care insurance payments are not considered income (but will count in determining the patient payment to the nursing home or HCBS). Income from a reverse mortgage also does not count, though if funds are retained beyond the month of receipt, they will count as a resource.
What counts as resources?
Anything of value that a couple owns jointly or separately that is not an exempt resource, is counted in the resource determination. This includes real estate (investment, rental and income properties), cash, checking and savings accounts, stocks and bonds, multiple vehicles, personal belongings (such as jewelry or works of art), Whole Life Insurance Policies (for the cash value), burial policies, revocable annuities, occasionally some irrevocable annuities and unearned income from rental properties or farms.
Exempt resources include:
- The home (with an equity limit of $560,000 and either the community spouse or dependent child as the primary resident)
- Car (the first vehicle is exempt, all others count)
- Personal belongings (clothing, furniture)
- Medical equipment necessary for the individual’s condition
- Items of individual education
- Items of personal care (such as a wheelchair)
- Term Life Insurance Policy
- Irrevocable or no cash value burial policies
- A revocable burial fund up to $1,500
- Some annuities (see Transfers Without Fair Consideration).
The community spouse may retain non-exempt resources of up to $120,900 (in 2017) in excess of the ill spouse’s $2,000. Resources in excess of this must be ‘spent down’ before an individual can be considered eligible for Medicaid. All of the ill spouse’s resources in excess of the $2,000 must be transferred to the Community Spouse Resource Allocation (CSRA), and should not be considered available to the ill spouse. All resource transfers from the ill spouse to the community spouse must occur within 90 days, or it will trigger a Transfer Without Fair Consideration.
Calculating the community spouse’s allowance
The community spouse’s allowance is known as the Minimum Monthly Maintenance Needs Allowance (MMMNA). That amount is calculated as follows: a base of $2,002 (in 2017) of income per month is allowed plus shelter costs (rent/mortgage + insurance + taxes + utilities [maximumm is $979]), with a maximum MMMNA of $3,023. There may also be exceptional circumstances allowance that can increase the MMMNA above $3,023. The actual amount the community spouse is allowed to keep from the ill spouse’s income is the MMMNA minus the community spouse’s own income.
The actual formulas may be more complex, but an MMMNA will not exceed $3,023 (in 2017) without an exceptional circumstances allowance. If you have questions, please contact us at 303-333-3482.