MEDICAID: INCREASING THE COMMUNITY SPOUSE RESOURCE ALLOWANCE
A married couple can ask the Department of Human Services to increase the protected amount for the stay at home spouse, called Community Spouse. The process is tricky. You cannot have first applied for Medicaid. You must seek an assessment of resources first. Then from that a Fair Hearing must be requested. From that an appeal must be made to the Director of the Department of Human Services.
If the income of both the community and institutionalized spouse is less than the Maximum Monthly Income Standard, then additional resources can be requested to be protected for the Community Spouse. The additional amount of resources that will be protected will be the amount needed to purchase a single premium lifetime annuity to increase the income up to the Maximum Monthly Income Standard. The annuity need not actually be purchased.
THE MEDICAID SPEND DOWN
The Medicaid spend down is when the Department of Human Services has determined that there exists resources above a protected amount for the Community Spouse that must be spent down. It is possible to actually gain benefit from the spend down if it is done properly.
DIVERSION OF INCOME
It may be possible to use the Family Law Court to qualify for Medicaid. It may be possible to divert income to the community spouse in a divorce action, as well as divide assets. You can usually expect that 50% of the resources to be awarded to the institutionalized spouse.
MEDICAID: INHERITANCE THROUGH COMMUNITY SPOUSE
It is usually recommended that a special revocable trust be put in place for the Community Spouse, one that prevents the Institutionalized Spouse from inheriting. If the Community Spouse should predecease the Institutionalized Spouse, steps need to be taken to prevent the property going back to the Institutionalized Spouse.
PROTECTION OF THE HOME
The home can be protected for the Community Spouse, a child under 21, a child who is blind or disabled as determined by Social Security, a sibling who owns part of the home and has lived in the home for at least a year or a child who have provided care for at least two years immediately before the date of nursing home admission.
GIFTING OF RESOURCES
After February 8, 2006, it is usually not recommended to make gifts before filing for Medicaid. All such gifts will be deemed to have been made at the time of the application and the penalty period will then only begin to run. While the penalty runs, the nursing home must be paid on a private pay basis.
THE FIVE YEAR MEDICAID TRUST
It is possible to protect any resource placed into a Medicaid protective trust established more than five years before Medicaid is applied for. It is possible to set up these trusts so that income can still be paid to the individual establishing the trust. It is possible to provide for the invasion of principal as well, as long as special care is taken to not do this in such a way that the trust would be considered available to Medicaid.
DOCUMENTS YOU WILL NEED
You will usually need to locate your current Social Security annual benefit letter, other income verification forms, 1099s and other notices of income adjustment that you may have received, deeds to real estate, financial account records and bank records for the last six months, ID Cards (drivers license, Social Security cards, birth certificate, marriage license, Medicare Cards, Supplemental Insurance Cards), marriage license, vehicle titles, life insurance policies, annuity contracts and certificates of deposit. Additional records may be required.