If you are a married couple, what happens to your income as a Medicaid applicant? Elder Law Attorney Jim Koewler joins Suzanne to answer this question.
They must be married; some states recognize common law marriage, others not. The income of the well spouse does not get to be used under Medicaid rules to pay the expenses of the ill spouse. That doesn’t mean that a nursing home might not try. If the ill spouse has more income than the well spouse, things get complicated — the ill spouse may have to share some of their income to the well spouse to use. If the well spouse’s housing costs are greater than “average,” they may get to have more of the ill spouse’s income.
Learn more at http://www.protectingseniors.com or email Jim at [email protected].
Lead image: courtesy of Pexels/Marcus Aurelius
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*The following is the output of transcribing from an audio recording. Although the transcription is largely accurate, in some cases it is incomplete or inaccurate due to inaudible passages or transcription errors.
The following podcast is by Mr Jim Koewler, elder law and special needs attorney, helping and protecting those who need long term care. And welcome everyone back to answers for elders radio network, here with Jim Koewler, elder law attorney extraordinaire and Jim the extraordinary private thank you. I love talking to you. So we have any full of hot air. But okay, we have talked a lot about obviously the spend down and you know, I’m really glad we also talked about the fact of thinking about it in advance. So when that time happens, you’ve got you’ve got your ducks on a row. And that’s for a single person. But now we’re going to talk about married people. That’s a total different story, isn’t it? Yes, well, I want to see a total different story, but it is a different story. Okay, it builds on what happens with a single person. Okay, it’s a modification what happens a single person. Okay, so one, they must be married. Some states recognize common law marriage, some states do not. They have to be married. They living together, they’ve been sharing expenses, but they’re not married. No benefits. No, not that the the the well partner doesn’t get anything, any of the benefits I’m gonna be talking about. Okay. Um. So the second, the second important point is the income of the well spouse does not get to be used by Medicaid to pay the expenses of the ill spouse. So what we’re looking at is whether the well spouse what Medicaid calls the community spouse, even though the the the ill spouse, who’s called an institutionalized spouse, may not be institutionalized because they may be staying home. Okay, but it’s still community spouse and institutional life spouse, because that that goes back to the basics of Medicaid for long term care being nursing home and nothing else, because at the time that Medicaid was created for long term care there was nursing home and nothing else. So, uh, so that terminology has has come, has followed through all the decades, even though not every institutional life spouse is in fact institutionalized. So the community spouses income is not available to pay the costs of care under the Medicaid rules for the for the institutional life spouse, okay, for the ill spouse, that doesn’t mean a nursing home may not try right because if people don’t know better, the nursing Hoodman come into it, then they’ll take it okay there, even if they’re not for profit, they don’t want to be. They don’t want to be money losing. Uh, and those that are for a profit obviously want to be making a profit. So they aren’t above some underhandedness and not being clear with spouses that they don’t have to pay. Okay, but under Medicaid rules, the well spouses the community spouses income. Remember, we’re talking I didn’t come. What comes in each month and get spent. You know, it wasn’t there before. Income Um does not have to be spent on the ill spouse, also called the institutionalized spouse. So that’s the second big tenant. Okay. So let’s assume, though, that the institutionalized spouse has more income than the community spouse. That’s where things get complicated and can be generous, maybe too strong a word, but the ill spouse may have to give some of his income to the institutionalize spouse to use. It’s not physically here, honey, here’s your money thing, but the Medicaid calculations it works out that way. Well, you can, I know, like with my father. I’m thinking about with my father. My father had the assets. My stepmother was twenty some years younger than him. Father, I know so so, but he had the assets right, so that I remember, he set up like a family trust. That was also upon his death. There was certain as our resources that he had life policies. All that stuff went into an irrevocable trust. And but he was never on Medicaid, but she ended up eventually going on Medicaid. But Um, that was a whole other because his was frozen. But there was a clause in there that said he had to pay so much into on catastrophic illness, it had to come out of the trust. So I don’t know. That was I’m sure that’s kind of what you’re talking about, right, yes and no, because that was how assets were. How Resources? Now you got me doing it. Resources were set up by your father and stepmother, by their attorney, as part of the state plan. It may have built into a long term care plan, but as part of a state plan. Okay, and remember now we’re simply talking about money that arrives every month. We’re focusing in this segment on income. So what your uh father and stepmother may have set aside among their wealth. That’s not income. So let’s say they did this and your father did in fact need long term care. I realized that’s not the case, but just just taking his taking him as an example. So you brought him up. Dad Did in fact need long term care and since, because he had more of the assets, he probably also had higher income during his working life and therefore had pipe had probably had higher income during retirement. Okay. So with as the spouse with the higher income, m he might have had to share so that income, even on Medicaid, with his with your step mom. Okay. Now, granted that’s he was going to either pay it to his care provider, the nursing omerces are living and as opposed to his wife. Okay, so it didn’t cost him anything. He ends up the same place financially, but she does not. Okay. So back when we’re talking about resources, I talked about below a certain number of about sixty dollars, the well spouse gets to keep half of the resources. Okay, this what I’m talking talking about. Income is related to that. It’s under the Federal Program of Avoiding spousal impoverishment. Big Fancy version making making we’re not going to make the community spouse broke. Okay, so they as part of the avoidance of Spousal empoverishment or Espousal empoverishment protections. Um, they the well spouse got to keep roughly half of the resources. But then when we look at income, we we aren’t looking at half and half, by the way, we’re looking at the income needs of the well spouse. First of all, there’s a certain minimumount based on the cost of living and I think I don’t think it’s a state from state to states. I’M NOT gonna say it’s based on the federal poverty level, but there is a number based on the cost of living. It’s probably uniform among the middle of the country states, but the higher income, you know, the higher cost states. The New York is, the Washington’s, the California’s, uh, they probably have a different number and it’s around twenty bucks a month here in the middle of America. Okay, if the well spouse doesn’t and I’m just gonna make the husband, the one in the nursing home because the women have driven US crazy and we I can make yeah, I can make it sexist joke. Sorry, Um, and I’M NOT gonna pick on guys. Come on, I’m a guy, Um and Um Um. So the husband’s in the nursing home, the wife is at home and he’s the well spouse, at least the better off of the two doesn’t yet need long term care. Her income isn’t twenty bucks by itself. Gross, by the way, you have to add and her medicare part. PUT Head back in. Her Medicare part B premium stakeing over Sol security. Add in taxes. If she has a pension, that’s worth of thing. Okay, gross it up. And if her income isn’t yet bucks, she gets to get some of the income from the husband each month to get up bucks. In addition, if her housing costs, or what we call shelter costs, Medicaid calls shelter costs, they’re still housing costs Um are higher than making air quotes average. She made it to take more. Okay. There is a certain amount of expected shelter cost and that really needs to be state specific. Big or in your California is it may be region specific. Okay, Um, it costs this much to how’s a person and if her again, I’m just gonna make the husband the one who’s in the nursing home. If the wife’s housing costs are higher than that standard number, then she needs to take additional income to fill in that gap between her actual housing costs and her income, I’m sorry, between her actual housing costs and the standard housing rate expectation. It’s kind of like the standard deduction and the with your taxes. There’s just a number that’s assumed. Okay, so that’s what the housing cost is. As part of the shelter costs, utilities are included and because utilities fluctuate from months to month, based on the price of oil, based on whether it’s summer or winter, the states have an assumed number. Again, I believe it’s states specific assumed number that if you spend a dollar, if you spend a penny on utilities, then they simply assume that you spend this much. In Ohio it’s like five three bucks. Okay. So if you spend a penny on electricity and don’t spend on anything else, no gas, no water, no sewer, but you spend a penny on electricity, then it’s assumed that you spend five three bucks on utilities. So you’re and then, let’s say the standard housing deduction. I should have looked up these numbers where we got on and it didn’t. Let’s say the standard housing expectation is, UH, seven hundred bucks, and I’m pretty close. You know how, by the way, there’s a hundred forty seven dollar difference there. Okay, so if your insurance, your real estate taxes, your home with his fees and if you have one a mortgage add up to more than hunt seven bucks on top of you paid anything for utilities, you’re now at the standard number. So if anything, anything above that standard number, you get to take out of the community, out of the ill spouses, these two slife spouses income each month to avoid spousal impoverishment. Now that is really if if someone stays on Medicaid, you know, past the Renewal Day, you know, up to the annual renewal date, that’s recalculated. They look at those things. They don’t look at anything else, uh, the spouses income, except do how are you compared to the national standard? Okay, they’re looking at the spouse’s wealth. At that point, the lottery. The commune spouse hit the lottery and has a million dollars. Doesn’t matter. These are those are resources. Okay, so they look at the well spouses income. How did it compared to the to the to the standard in that area, including the current housing, the shelter cost standard, including within that the current utilities expected number. I guess I would call it a standard, but to think of it as a standard Um. And then homeowners fees, uh it, real estate taxes, mortgage and insurance. And recalculate the month. What the the income share, which we call monthly income. Alot and Jim and I are going to be right back everyone in the next segment, state of Ohio. Residents, you have a friend to help you navigate long term care while protecting your assets. You can reach Jim at protectingseniors.com, or just email him at [email protected] [email protected]
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Founder and CEO of Answers for Elders, Inc., Suzanne Newman proclaims often, “Caring for my mom was the hardest thing I ever have done, but it was also my greatest privilege.” Following a career of over 25 years in sales, media, and marketing management, Suzanne Newman found herself on a 6-year journey caring for her mother. Her trials and tribulations as a family caregiver inspired an impassioned life mission outside of the corporate world to revolutionize the journey that so many other American families also find themselves on. In 2009, she became the founder and CEO of Answers for Elders, Inc., subsequently hosting hundreds of radio segments and podcasts, as well as authoring her first book. Suzanne and Answers for Elders, Inc. have spent 14 years, and counting, committed to helping families and seniors along their caregiving journeys by providing education, resources, and support. Each week on the Answers for Elders podcast, Suzanne is joined by vetted professional experts in over 65 categories including Health & Wellness, Life Changes, Living Options, Money, Law, and more. Suzanne lives in Edmonds, Washington with her husband, Keith, and their two doodle dogs, Whidbey and Skagit.
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