553           PREVENTING SPOUSAL IMPOVERISHMENT

 

Medicaid has unique ”spousal impoverishment” rules designed to keep a spouse who is still living in the community from being impoverished when trying to support a spouse who is in need of long term care in a medical institution, nursing home, or through Home and Community Based ( HCB ) waiver services.   Spousal impoverishment rules allow the couple to retain a certain amount of resources and income that are above the APA-related Medicaid financial limits and allocate those resources and income to the community spouse.  There are also post-eligibility income allowances for maintaining a community spouse.  See Section 570 for policy on post-eligibility and cost-of-care.

 

553 A.      DEFINITIONS

 

Community Spouse:  The spouse of an applicant or recipient of long-term care Medicaid.  A community spouse resides outside of an institution and is not receiving HCB waiver services.

 

Continuous Period of Institutionalization:  At least 30 consecutive days of residing in a medical institution, nursing home, or receiving HCB waiver services.

 

Community Spouse Income Allowance:  The amount of the long-term care spouse’s income that may be allocated to the community spouse in order to raise the community spouse’s gross income up to the Community Spouse Monthly Maintenance Standard.  See Addendum 1.

 

Community Spouse Resource Allowance:  The amount of the long-term care spouse's resources that may be allocated and subsequently transferred to the community spouse, or to another person for the sole benefit of the community spouse, prior to a determination of eligibility for long-term care services.  See Addendum 1.

 

Long-Term Care ( LTC ) Spouse:  A spouse residing or likely to reside in a medical institution or nursing home for a continuous period of institutionalization or who is approved for Medicaid HCB waiver services.

 

Spouse:  A person legally married to another under State law.

 

553 B.      OPTIONAL PRELIMINARY RESOURCE ASSESSMENT

 

At the beginning of a continuous period of institutionalization, either spouse, or a representative acting on behalf of either spouse, may request and receive an assessment of the couple's combined resources.  The assessment will calculate the total value of the couple's combined countable resources, owned either jointly or separately, as of the date on which the institutionalization in a medical institution or nursing home began.  The assessment will provide the couple with the information necessary for their financial planning.  An application for Medicaid is not required in conjunction with the assessment.

 

Note:

This assessment does not apply to HCB waiver individuals.

 

The assessment request is made by the requester by completing a NH8 - Resource Assessment Request form, which is available on the DPA e-forms web site at http://dpaweb.hss.state.ak.us/e-forms/pdf/nh8.pdf. This form asks the requester to complete a list of the couple's resources and their current fair market value and present it to the nearest Public Assistance District Office for assessment.

 

Upon receipt, the caseworker must review the request and if it is incomplete or ownership and/or value of resources is questionable, request additional documentation or verification.  If the requester has provided the information necessary to complete an assessment, the caseworker must compute the total countable value of the couple's resources, complete the Resource Assessment form, and send one copy to each spouse, or their representative.  One copy of this form must be retained by the agency for one year.

 

The Resource Assessment informs the spouses that the assessment calculation is only as accurate as the amounts that they have provided.  If these amounts prove to be inaccurate at a later date, the agency is not bound to use them to determine eligibility.  The form also states that if they disagree with the assessment determination, they may submit an application and if they are not found eligible, may request a fair hearing.

 

The assessment should be completed in a timely manner, within 45 days after receipt in the district office of the request or the necessary verification.

 

553 C.      SUBSTANTIAL HOME EQUITY

 

An individual whose equity interest in a home exceeds the amount listed in Addendum 1, Excess Home Equity, is NOT eligible for long-term care or home and community-based waiver services. Determine if the individual is eligible for regular Medicaid.

 

Exception:  

This limitation does not apply if the community spouse, the individual’s child under age 21, or the individual’s blind or disabled child of any age is residing in the home.

 

An individual may use a reverse mortgage or home equity loan to reduce the equity interest in the home.  If the individual has a reverse mortgage or home equity loan, consider this in determining countable home equity.

 

If the individual has shared ownership in the home, only the fractional interest of the individual seeking long-term care or home and community-based services is considered.  For example, if the home is owned by an applicant and a sibling, one-half of the home’s equity value is used in calculating the equity value for the individual, unless the individual can prove that he or she does not have equal ownership in the property.  

 

Re-evaluation of home equity is required at each review.  The appreciation of home equity could result in disqualification of institutional or waiver services if the home equity value exceeds the limit.

 

553 D.      RESOURCE ELIGIBILITY DETERMINATION AND ALLOTMENT OF RESOURCES

 

All countable resources owned by either spouse, jointly or separately, are pooled together as of the date of institutionalization or potential approval of HCB waiver services.  Before the eligibility determination is made for the LTC spouse, resources may be allotted to the community spouse, up to the Maximum Community Spouse Resource Allowance.  See Addendum 1 - Program Standards.  Any amount exceeding this allowance must be considered available to the LTC spouse in the eligibility determination, regardless of which spouse owns the excess.

 

To determine resource eligibility for the LTC spouse:

 

  1. Total all resources of the applicant and community spouse.

 

  1. Deduct from the current combined countable resources the Maximum Community Spouse Resource Allowance (or a higher amount ordered by a court or fair hearing decision - see Subsection F.).

 

  1. Compare the amount of any remaining resources to the resource eligibility standard for one person.  See APA Manual Section 430-2.  If the amount is equal to or below the resource eligibility standard, the LTC spouse is resource-eligible; if the remaining resources exceed the eligibility standard, there is no Medicaid eligibility.

 

Example 1:

A couple's combined countable resources at the time of the institutionalized spouse's Medicaid application are $117,000.  The Maximum Community Spouse Resource Allowance is $113,640 (for 2012) and the eligibility resource limit is $2,000.

Step 1:
Deduct from combined countable resources of $117,000, the Maximum Community Spouse Resource Allowance of $113,640.

Step 2:
The remaining $3,360 is used to determine the LTC spouse's Medicaid eligibility.  This amount exceeds the resource limit, so there is no Medicaid eligibility.

 

  1. Inform the applicant that he/she is over resource and spend down is necessary.  Explain to the applicant what appropriate spend down actions to take in order to avoid a transfer of asset penalty.  However, never give advice or tell the applicant what steps to take.

 

  1. When the resources are equal to or less than the Maximum Community Spousal Resource Allowance, complete the eligibility determination, adjusting the benefit start date.  When approving Medicaid for HCB waiver services or Nursing Home care, send the M005 - Notice To Transfer Resources To Spouse.  This notice explains that the applicant has one year to transfer all resources into the community spouse’s name.

 

Example 2:

Use Example 1, except the couple's combined resources are $114,250.

Step 1:
Deduct from combined countable resources of $114,250, the Maximum Community Spousal Resource Allowance of $113,640.

Step 2:
The remaining $610 is used to determine the LTC spouse’s Medicaid eligibility.  This amount is less than the APA resource limit of $2,000, so the LTC spouse is resource-eligible.

 

553 E.      REDETERMINATION OF ELIGIBILITY FOR THE LTC SPOUSE

 

The Maximum Community Spousal Resource Allowance held in the name of the LTC spouse continues until the next regularly scheduled annual review.  

 

When there are changes in the amount of resources following the initial eligibility determination, the caseworker must revaluate the resource eligibility of the LTC spouse, but the Maximum Community Spousal Resource Allowance remains in effect until the next regularly scheduled annual review.  After that time, resources held in each spouse's name are considered available only to the spouse in whose name they are held.  

 

 Note:

It is important to let both spouses know of this policy in writing, so that they have adequate time to transfer resources to the community spouse’s name.

 

553 F.      TRANSFER OF RESOURCES TO THE COMMUNITY SPOUSE

 

Once eligibility has been established for the LTC spouse, resources not used to determine eligibility (i.e., resources allotted to the community spouse) must be transferred to the community spouse to assist that spouse in meeting his or her needs in the community.  This transfer should be done as soon as it is practicable.  This must be done before the first annual review of eligibility for the LTC spouse.

 

When the first renewal is received, check and ensure that all the resources had been transferred to the community spouse:

 

 

 

553 G.      INCREASES TO MAXIMUM COMMUNITY SPOUSAL RESOURCE ALLOWANCE

 

The Maximum Community Spousal Resource Allowance may be increased in the following ways:

 

  1. When the Hearing Authority issues a decision that a higher amount of resources must be retained by the community spouse so that the income generated from those resources is adequate to raise that spouse's income to the minimum amount that may be deducted as a maintenance allowance in the post-eligibility determination (see Section 570); or

 

  1. When either member of the couple alleges that the resource determination was incorrect, and the Hearing Authority concurs; or

 

  1. A court support order mandates that additional amounts of the LTC spouse’s resources be transferred to the community spouse or other dependents; or

 

  1. The Division of Public Assistance determines that denial of eligibility would create undue hardship.  

 

Note:

The Medicaid Policy Specialist or designee makes this decision on a case-by-case basis.

 

 

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MC #24 (03/12)