| In a related article, I
the review Medicaid "resource assessment"
rules that allow you to protect certain
assets when your spouse enters a
nursing home. These rules are
designed to make sure that the
spouse in the community
is not rendered penniless by having to
deplete all of the couple's
resources to pay for a nursing home
stay. The government recognized that
these asset protection rules
wouldn't mean much if the healthy
spouse didn't also have
sufficient income to meet his or her
basic needs. As such, there
are also "maintenance allowance"
rules that make sure the healthy
spouse has sufficient
income to live.
To explain the "maintenance
allowance" rules,
let's consider an example. Assume
your husband enters a nursing home,
and your assets have been spent down
to the level where the Medicaid
program
starts paying his nursing home
bill. In Pennsylvania, at this
point, all of his monthly income, less
a $45 personal needs allowance
(effective 7/1/07)
must be paid to the nursing home
as his contribution to the cost of
his care. Examples
of income are social security, pensions,
interest, and dividends.
However, if you are still living
in the community and your income
is below the
minimum maintenance allowance, you
will get to retain all or a part of
his income. The basic minimum
"maintenance allowance" effective
as of July 1, 2012 is $1,892 per
month. This minimum is increased
if your housing expenses
are greater than certain standard
allowances, with a current maximum
maintenance allowance
of $2,898 (effective 1/1/2013) per
month.
Taking our example further, let's
assume that
your husband's income is $1,500
per month, consisting of a $300 pension
and Social Security of $1,200. Your
income on the other hand is your
Social Security
of $892 per month. Without the
special spousal protections, your
husband's income would
go toward paying his nursing home bill
and you would be stuck
living on just your $892 Social
Security payment. However, since
the "maintenance
allowance" rules allow you income
of at least $1,892 per month, this
means you get to keep at least $1,000
of your husband's income. That is,
when the
$1,000 of your husband's income is
combined with your $892 Social
Security, you have the $1,892
minimum.
These income protections sound
great. However,
if we follow this one step further,
we'll discover that there is a problem
when the husband in our example
dies. The problem is that his
income often
ends when he dies. That is, his
pension will most likely end or be
reduced, and his Social Security
will also stop. While your Social Security
may increase
when your husband dies, after his
death, your overall income is
likely to be lower than the
$1,892 minimum. Because of this problem,
Pennsylvania used
to have an option that would
permit you to protect additional
assets in lieu of keeping
some of your husband's income. In our
example, you have an income
need of $1,000 per month, and
Pennsylvania used to permit you to
keep additional
assets that would have theoretically
produced $1,000 each month for the
rest of your life. However, as a
result of changes implemented by
Pennsylvania
on March 5, 2007, there are new
ways for a low-income community
spouse to protect
additional assets. Navigating the
new rules requires prompt action.
As such, the low-income
community spouse needs expert
advice more than ever
in order to preserve assets so
he or she avoids impoverishment.
In general, no special action is
needed to request
the basic "maintenance allowance".
However, if you wish to protect
additional assets, you should
seek expert advice before you consume
those assets to
pay for your spouse's care. The
bottomline is that taking proper
steps when your spouse
enters a nursing home could make the
financial side of the long-term
care decision less burdensome.
For other nursing home and
Medicaid information
check out the articles on Medicaid and Your
House and Gifts to Qualify for
Medicaid.
Added 2/21/1999
Last Revised 1/6/2013
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