Reed: Automatic Medicaid qualification for spouse entering nursing home

Sandra W. Reed
Special to the Reporter

Teresa and Jay are in their 80s. Jay has recently suffered a stroke and had to enter a nursing home. Teresa is in good health and able to remain at home.

They own their own home, one automobile, their household furnishings, a small savings account and a bank account into which they deposit their monthly Social Security checks. They are concerned whether Jay can qualify for Medicaid.

Sandra Reed

Income limits to qualify for Medicaid for long-term care

Medicaid income limitations for applicants are adjusted each year. Jay’s gross income is less than $2,382 a month, the limit allowed for 2021, so there is no impediment to his qualifying for Medicaid based on his income. Even if it were higher than that amount, Jay could qualify with a Miller Trust, the explanation of which is beyond the scope of this article.

Teresa, as the stay-at-home spouse, can retain all the monthly income in her name. Her monthly income is less than $3,259.50 so she can retain the portion of Jay’s income that would bring hers up to that amount.

If both Jay and Teresa’s combined incomes were less than $3.259.50, Teresa may be able to retain more countable resources than would otherwise be allowed. However, that is not the case for them.

Resource limits to qualify for Medicaid for long-term care

Jay and Teresa’s countable resources are totaled, without regard to whose name the property is listed under or whether an asset is the separate property of one of them. This total is then divided in half.

Their residence is not a countable asset. Neither is the one vehicle they own. If they had a prepaid burial plan, that would not be a countable asset either. However, they don’t have one. If they had a whole life insurance policy with a small face value that would not be counted. But they don’t own one.

The general rule is that the spouse retains one-half of the countable assets and the spouse applying for Medicaid must spend down to $2,000 in countable assets. However, to avoid impoverishment of the stay-at-home spouse, if the countable assets are less than $26,076, the stay-at-home retains all the countable assets. This is the case for Teresa and Jay will be eligible for Medicaid immediately.

Sandra W. Reed practices Elder Law in Somervell County, handling probating of estates, drafting of wills, trusts, powers of attorney and deeds as well as estate and Medicaid planning.  She lives on beautiful Chalk Mountain and can be reached at 254.797.0211; 817.946.2809 or at sreed@kbzlaw.com.