MEDI-CAL “SPOUSAL IMPOVERISHMENT” FIGURES FOR 2016Category:
As many of you may know, there was no “cost of living” adjustment for Social Security benefits for 2016. Due to a flat consumer price index, 2015 monthly Social Security benefits will stay the same for 2016. The same is true for the “Spousal Resource Allowance” and “Minimum Monthly Maintenance Needs Allowance” figures. These are the figures which are used in determining eligibility for Long Term Medi-Cal, which pays for skilled nursing care for qualified applicants. “Medi-Cal” is California’s version of the federal “Medicaid” program. Other states have similar eligibility rules under the Medicaid program, although the dollar amounts and some of the regulations under which the program is administered do vary somewhat from state to state. Non-California readers should consult a qualified source in their home state to verify the figures and how the program is administered in that state.
The Spousal Resource Allowance is the amount that a healthy spouse is allowed to retain in non-exempt “countable” assets, while still permitting an ill spouse to qualify for Long Term Medi-Cal benefits for skilled nursing care. The resource allowance figure is typically adjusted annually for increases in the cost of living. However, since there was no increase in the cost of living in 2015, the standard Spousal Resource Allowance will remain the same for 2016, at $119,220. That means that the healthy spouse can retain $119,220 in cash, stocks, bonds, recreational vehicles, art, or any other non-exempt assets, in addition to exempt assets such as a home, an automobile, household furniture and furnishings, burial plot, pre-need burial fund, etc. and still obtain Medi-Cal benefits to pay for the skilled nursing care for the ill spouse. The standard Spousal Resource Allowance can be retained by the healthy spouse regardless of need. Where the healthy spouse’s income is very low, the Resource Allowance can actually be increased above the standard allowance in order to provide a sufficient fund to generate additional income for the healthy spouse. It is not unusual for a resource allowance to be increased to $200,000 or higher where a healthy spouse has no pension or is entitled to only limited Social Security benefits.
As with the Spousal Resource Allowance, the Minimum Monthly Maintenance Needs Allowance (MMMNA) is also indexed for inflation. And, like the Spousal Resource Allowance, the MMMNA will remain the same in 2016 as it was in 2015, at $2,980.50. The healthy spouse will be entitled to keep $2,980.50 of the parties’ combined monthly income before any of the ill spouse’s income must be used toward the ill spouse’s skilled nursing care. For example, if an ill spouse has Social Security benefits of $1,400 per month, the healthy spouse receives Social Security of $700 per month and the parties receive $700 per month from their investments, the healthy spouse can keep all of the combined income ($2,800) and the ill spouse’s skilled nursing care will be paid entirely by Medi-Cal. If their combined income goes above $2,980.50 per month, then the excess income of the ill spouse must be applied toward the skilled nursing care, after giving the ill spouse a $35 monthly allowance, unless the healthy spouse obtains a court order increasing the monthly support amount based upon the healthy spouse’s actual monthly budgeted expenses.
Note, however, when the combined income of a couple exceeds the $2,841 amount, only the ill spouse’s income must be applied toward the skilled nursing care. For example, if the healthy spouse receives $1,200 in Social Security benefits and $2,500 in pension payments, the healthy spouse can keep the entire $3,700, even though it exceeds the MMMNA. That is why the figure is called the “minimum” needs allowance and not the “maximum” allowance. Of course, any income received in the name of the ill spouse would have to be applied toward his or her skilled nursing care expenses, unless the healthy spouse obtains a court order for additional support, based upon the marital standard of living. While some Medi-Cal planning can be done at the last minute, the key to obtaining the maximum benefits available under the program is to plan as far in advance as possible, so that Medi-Cal benefits can be applied for before resources are unnecessarily depleted.
Once again, non-California readers should consult a qualified person in their home state to verify the rules and dollar amounts relevant to that state’s Medicaid program. One good source from which to obtain a referral to a qualified Medicaid planner is the National Academy of Elder Law Attorneys at NAELA.org. California readers can contact William R. Remery through his Wellness Village page.