MEDI-CAL PLANNING FOR MARRIED COUPLES

The Spousal Impoverishment provisions of the Medicare Catastrophic Act of 1988 present additional opportunities to plan and qualify for Medi-Cal for married couples. The at-home spouse is entitled to keep, in 2017, a minimum of $120,900 of non-exempt assets. This is known as the community spouse resource allowance or CSRA. This, combined with the $2,000 property reserve that the applicant can keep in his or her name, allows the at-home spouse to have access to $122,900 of non-exempt assets.

After qualification, the nursing home spouse’s name must be removed from all assets making up the CSRA and, in most cases, it is advisable to have his or her name removed from the exempt assets, such as the home, as well. This can only be done if the estate planning documents of the nursing home spouse grant the other spouse authority to make gifts or through a court order.

In addition, the law requires that each state establish a monthly income floor for the at-home spouse known as the Minimum Monthly Maintenance Needs Allowance or MMMNA. In California, the maximum MMMNA is used, allowing the at-home spouse to have a minimum monthly income of $3,023.

A court order can help married couples.

If the at-home spouse does not have at least $3,023 in income, then he or she is allowed to enlarge the CSRA to keep assets over $122,900 in order to generate interest income to make up for the shortfall in income. If the increased CSRA is not enough to make up the shortfall, the at-home spouse can also take the nursing home spouse’s remaining income to reach the $3,023 figure. This increase in the CSRA can be done through a court order (often combined with a request to remove the nursing home spouse’s from all assets).

To illustrate, assume the at-home spouse receives $500 per month in Social Security, the nursing home spouse receives $1,000 per month in Social Security, and they have $150,000 of non-exempt assets. The at-home spouse has an income shortfall of $2,523 per month. With proper advice and assistance, the at-home spouse would be able to keep all $150,000 of non-exempt assets and keep all or a portion of the nursing home spouse’s income as well. Again, this must be done through the Superior Court.