Who is the “Community Spouse” in Long-Term Care Planning and What Can They Expect?

– Andrew Brower

When one of two spouses goes to a long-term care facility and applies for benefits, there is important lingo to be aware of when speaking with an elder law attorney and/or applying for benefits.  The spouse in the long-term care facility is called the “Institutionalized Spouse” and the other spouse is referred to as the “Community Spouse.”  In this blog, I discuss the asset and income allowances for the “Community Spouse.”

There is a Community Spouse Resource Allowance (CSA) to preserve assets for the community spouse.  This is the amount of countable assets the Community Spouse will not have to spenddown for the Institutionalized spouse to be eligible for Medicaid benefits.  To know how much the Community Spouse gets to keep when one spouse goes to a long-term care facility, there is a complicated formula.    

First, you must determine the CSA date which is based upon a 30-day consecutive stay in a hospital or long-term care facility but has many nuances which must be considered.  Specifically, the CSA date is as of the end of the month immediately preceding the beginning of the couple’s first “continuous period of institutionalization” or “CPI.” The CPI is the date on which either spouse entered either a hospital or a long-term care facility in which he or she then stays for at least 30 days.

Example of CSA date: If Louise first entered the hospital for care on May 15, and then moved to the nursing facility for rehab, her CPI would include her days in the hospital stay plus her nursing home stay. Once the combined stay is at least 30 days, then her (and her spouse’s) CSA date is established. The Snapshot date would be April 30 (the end of the month prior to Louise entering the hospital at the beginning of her CPI).  Even if Louise goes home and does not apply for Medicaid until many years later, the couple’s CSA date has been set for both spouses. 

If you believe you and your spouse have established CSA, even if both spouses are home doing fine now, you should document the dates and occurrence.  It is also a great time to speak with our firm about planning because it gives us much useful information for planning purposes. 

In order to be eligible for Medicaid benefits in a skilled facility, you may have no more than $2,000 in countable assets.  That said, your spouse gets to keep an allowance based on the CSA date.   Once you know the CSA date, you must then determine the total countable assets owned by both spouses on the CSA date.  In general, the community spouse gets to keep one-half (50%) of the couple’s total “countable” assets on the CSA date up to a maximum of $130,380 and subject to a minimum allowance of $26,076.  These amounts change every couple of years due to increased costs of living.    

The nursing facility or Medicaid worker may tell you that the Community Spouse has to spend half of their asset, but this is inaccurate as the formula is much more nuanced than spending half of the couple’s asset.   

Example: If a couple has $102,000 in countable assets on the CSA date then the Community Spouse will get to keep $50,000 and the spouse in the care facility will get to keep up to $2,000.  The remaining $50,000 will either have to be spent down or protected through Medicaid planning strategies.  If a couple has $400,000 in countable assets on the CSA date, then the Community Spouse will get the keep the maximum allowance of $130,380, the Institutionalized Spouse will keep $2,000 and the remaining $267,620 will need to be spent down or protected through planning strategies.  If a couple has $15,000 in countable assets on the CSA date, then the Community Spouse will get to keep it all due to the minimum $26,076 allowance. 

What about the Institutionalized and Community Spouse’s Income?

If you are on Medicaid in a skilled nursing facility, you have what is called patient monthly liability or PML.  PML is your liability for the nursing facility bill.  Your PML is typically your income minus $30.00.  In other words, you get to keep $30.00 of your income and the rest is paid towards PML.  However, there are other factors such as supplemental health insurance and VA benefits which can affect PML.  Medicaid will pay the balance i.e. the difference between PML and the Medicaid rate (the regulated amount Medicaid must pay the facility).    Once Medicaid is approved, Medicaid will begin paying your Part B Medicare premium which means your income will actually increase by the amount of the Part B premium.

If married, the income of the Community Spouse is not counted in determining the Medicaid applicant’s PML. Only income in the applicant’s name is counted. Thus, even if the Community Spouse is still working and earning $4,000 a month, they will not have to contribute to the cost of caring for their spouse in a skilled nursing facility receiving Medicaid benefits.

What if the Institutionalized Spouse has the higher income?

In such cases, the Community Spouse may be entitled to part or all of the monthly income of the Institutionalized Spouse. How much the Community Spouse is entitled to depends on what the Medicaid agency determines to be a minimum income level for the community spouse. This figure, known as the minimum monthly maintenance needs allowance or MMMNA, is calculated according to a complicated formula.

The minimum MMMNA is currently $2,155.00, but a Community Spouse can request a higher amount.  If the Community Spouse’s own income falls below MMMNA, the shortfall is made up from the Institutionalized Spouse’s income.

Example: Mr. and Mrs. Brown have a joint income of $4,000 a month, $2,500 of which is in Mr. Brown’s name and $1,500 is in Mrs. Brown’s name.  Mr. Brown enters a nursing home and applies for Medicaid. The current MMMNA is $2,155.  Since Mrs. Brown’s who is the Community Spouse’s income is only $1,500 a month, the Medicaid agency allocates $655 of Mr. Brown’s income to Mrs. Brown.

Since Mr. Brown also may keep a $30-a-month personal needs allowance, his obligation to pay the nursing home is only $1,815 a month of his $2,500 a month total income ($2,500 – $655 – $30 = $1,815).  He would write a check or transfer $655 to Mrs. Brown every month. 

Long-term care planning is complicated and fluid.  It’s always impossible to predict when and if one or both spouses will need long-term care and who may need it first.  But with an acute understanding of the system, an elder law attorney can help provide guidance.  If you would like to speak with an attorney regarding long-term care, call any one of our offices.