Spousal Impoverishment Protections
In the case of a married couple, when one spouse is applying for Medicaid long term care or HCBS benefits and the other spouse is not, federal law provides special resource and income protection for the spouse not applying for benefits. Under these Spousal Impoverishment Protection rules, the spouse who will receive Medicaid long term care or HCBS benefits is called the “institutionalized spouse;” the spouse not receiving benefits is called the “community spouse.”
Resource Protection: The Community Spouse Resource Allowance (CSRA)
The community spouse can retain a certain amount of countable resources without affecting the institutionalized spouse’s Medicaid eligibility. The amount retained is called the Community Spouse Resource Allowance (CSRA). The CSRA for 2012 is $113,640. The CSRA is in addition to both the $2,000 the institutionalized spouse is entitled to retain and the exempt resources discussed above.
Income Protection: The Minimum Monthly Maintenance Needs Allowance (MMMNA) and the Monthly Income Allowance (MIA):
The MMMNA is the amount of monthly income the community spouse needs to pay for his or her basic needs within the community. Medicaid sets limits on this amount, which are adjusted on July 1 each year. The current MMMNA amount limits are:
Basic Allowance $1839 (as of July, 2011)
Plus Excess Shelter Allowance
House Payment/Rent plus Maintenance Fee
plus Insurance plus Taxes plus Utilities
(actual or $374, whichever is larger),
Plus Family Allowance
Equals the MMMNA (which cannot exceed $2841.00 in 2012)
The MIA is the amount of the institutionalized-spouse’s income that is contributed to the community spouse if his or her income does not equal the MMMNA (MMMNA – the community spouse’s income equals the MIA).
If the MIA amount is not sufficient to increase the community-spouse’s income to the MMMNA amount, the community spouse may request an increase in his or her CSRA. The institutionalized spouse’s income must be applied first to determine if there can be an increase in the CSRA. This “income first” rule, which has long been applied in Colorado, is now mandated in all states under the DRA.
The amount of the increase in the CSRA is measured by the cost of a commercial, irrevocable, immediate annuity that will make monthly payments equal to the amount by which the community spouse’s monthly income, after inclusion of the MIA, falls short of the MMMNA. However, the community spouse is not required to use the increase in the CSRA amount to actually purchase such an annuity.