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Medicaid Planning for Married Couples

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Medicaid Rules for Married Couples

In Pennsylvania, the Medicaid eligibility rules for nursing home care for married couples are designed to protect the healthy spouse (the community spouse) from financial hardship while ensuring that the spouse receiving care (the institutionalized spouse) receives necessary long-term care benefits. Here are some key aspects of Medicaid eligibility for married couples in nursing homes:

  1. Community Spouse Resource Allowance (CSRA):  The community spouse is entitled to keep a certain amount of countable resources (assets) known as the CSRA. In 2024, this amount is $154,140. The institutionalized spouse can keep either $2,000 or $8,000 in countable assets.
  2. Minimum Monthly Maintenance Needs Allowance (MMMNA).  The community spouse is entitled to a Minimum Monthly Maintenance Needs Allowance (MMMNA) to ensure they have enough income to live on. If the community spouse's income is below this threshold of $2,465 in 2024, they may be entitled to a portion or all of the institutionalized spouse's income.  In fact the Maximum Monthly Maintenance Needs Allowance is $3,8530.50.
  3. Spousal Impoverishment Rules: These rules aim to prevent the community spouse from becoming impoverished due to the cost of long-term care. They include provisions for income and asset protection for the community spouse.  However, if you do not seek the proper advice and counsel from an Attorney at Zacharia Brown, you may find yourself impoverished and without the protection of rules.
  4.  IRA as an Exempt Asset for the Community Spouse: The IRA of the community spouse is an exempt asset, meaning it is not counted toward the asset limit for Medicaid eligibility; however, the IRA of the institutionalized spouse is a countable asset for Medicaid eligibility purposes. If the IRA balance exceeds the asset limit, the institutionalized spouse will to liquidate or spend down the excess assets to meet the eligibility requirements.
  5. Resource Allocation:  If the couple's countable resources exceed the CSRA, there are strategies to reallocate resources to the community spouse to bring them within the allowable limit. This can involve converting countable resources into exempt assets, such as home modifications or purchasing an annuity.
  6. Medicaid Compliant Annuity: Converting excess assets (i.e assets that you would otherwise have to spend down) into a Medicaid Compliant Annuity can provide a stream of income to the community spouse while reducing countable assets. The annuity must meet certain criteria to be considered exempt for Medicaid purposes.  Do NOT attempt to shelter assets using a Medicaid Compliant Annuity unless you are under the guidance of an experienced elder law attorney.
  7. Protecting the Family Home: To protect the family home from Medicaid’s Estate Recovery Program, it is important to remove the name of the institutionalized spouse from the deed and transfer the deed to the community spouse’s sole ownership.  In addition, it is important to revise the last will & testament of the community spouse to prevent assets that were able to be protected from being transferred back to the institutionalized spouse’s name as a result of the unforeseen passing of the community spouse prior to the nursing home spouse.
  8. Lookback Period: Pennsylvania, like most states, Pennsylvania has a Medicaid "lookback period" during which any gifts or transfers of assets are scrutinized for five (5) years prior to applying for Medicaid.  This does NOT mean that we cannot devise a plan to gift assets, it simply means we must understand the gifting rules and devise a plan to benefit the client, rather than harm the client.  In addition, the lookback period does not apply to transfers between spouses.
  9. Penalty Period:  If assets are gifted during the lookback period, Medicaid imposes a penalty period during which the individual is ineligible for benefits. The length of the penalty period is calculated based on the value of the gifted assets and the average monthly cost of nursing home care in the state.  We often use the penalty period to our advantage by devising a gifting plan to purposely impose a penalty period.  This allows us to maximize the protection of assets and identifies a date certain in which the client will be eligible for Medicaid.

It's crucial to consult with an attorney who specializes in elder law and Medicaid planning in Pennsylvania to navigate these strategies effectively and ensure compliance with state and federal laws. Everyone’s situation is unique, and the right approach will depend on various factors, including the value of assets, the level of care needed, and the individual's long-term goals.

How We Can Help

There are numerous opportunities, under the professional guidance and experience of the elder law attorneys at Zacharia Brown, to save money, protect a family home, and preserve life savings. Rather than depleting significant financial resources to pay for nursing home or in-home care costs, a far better choice is to retain Zacharia Brown as your legal advocate. They will guide you throughout the Medicaid eligibility and application process to ensure that you or a loved one will secure the long-term care that you need.