Nursing homes are expensive, even if Medicaid benefits are available. It’s especially difficult when a married couple is split up. The emotional toll is great, but there’s also the problem of providing for expensive residential care for one person while maintaining quality of life for the other. Medicaid offers a way that may prevent the spouse from becoming impoverished.
What is a Community Spouse Resource Allowance?
This is an allowance of resources for the husband or wife of a Medicaid recipient (the community spouse). Resources includes money and other assets. The allowance means the community spouse gets to keep a certain amount of resources instead of spending them down to qualify.
Though based on the value of the couple’s resources at the time of admission, the community spouse resource allowance is usually applied after admission. The community spouse resource allowance in Alabama is equal to ½ of the total non-exempt assets with a maximum of $123,600. So, if a couple has $500,000 in non-exempt assets, they will have to spend those assets down until there are is only $123,600 left for the community spouse!
According to Medicaid rules, the community spouse is the spouse who is not entering a nursing facility. The community spouse is allowed to retain the following exempt assets:
- The family home if the community spouse is still living there,
- Furnishings and other personal belongings,
- One automobile,
- Pre-paid burial plans,
- Life insurance policies, as long as the face value is below the allowed limit.
- The community spouse’s retirements accounts, and
- The Community Spouse Resource Allowance that is ½ of the total assets up to $123,600. Of non-exempt countable resources.
What does “spending down” have to do with my Community Spouse Resource Allowance?
Sometimes the value of an applicant’s income and resources exceeds Medicaid’s limits.
Medicaid will first add together the couple’s countable resources. Then the amount the community spouse is allowed to keep, generally 50% of the assets up to $123,600, is subtracted from the total, along with a small sum for use by the Medicaid applicant ($2,000). Sometimes the remaining amount is more than Medicaid’s limit. In this situation, the applicant will have to spend down their resources to get down to the level where they are eligible for Medicaid benefits.
Have questions or concerns about Medicaid?
Talk to people who know the Medicaid system. We have worked with many families just like yours to help them navigate the Medicaid maze and saved them thousands of dollars. The attorneys at Miller Estate and Elder Law can help you with eligibility planning, applications, and asset protection. For a free consultation, contact us at 256-251-2137 or use our convenient Contact Form. We have offices in Anniston and Birmingham and we assist clients in the Gadsden, Leeds, Hoover, Talladega, Vestavia Hills, and surrounding areas.
