Wes Coulson Explains the Illinois and Missouri Rules, and That Planning Produces Better Results than the Rules would Suggest.
The original newsletter that everyone received via an email newsletter today was taken from the National Academy of Elder Law Attorneys (NAELA), a very reputable source. Upon reviewing the article, Wes Coulson noted a need for changes and clarification based on rules specific to Illinois and Missouri. What appears in italics or bold after certain excerpts of the original article is Wes’s notes on the matter. This illustrates the hazards of “believing what you see on the internet.” Because so much of Medicaid is based on state-specific rules, regulations and even unpublished interpretations of rules and regulations, it is of tremendous importance to have a qualified Elder Law attorney to help guide you through this complex and confusing process.
Thank you, Kate Baumgartner Director of Client Outreach and Community Development
Medicaid law provides special protections for the spouses of Medicaid applicants to make sure the spouses have the minimum support needed to continue to live in the community while their husband or wife is receiving long-term care benefits, usually in a nursing home.
The so-called “spousal protections” work this way: if the Medicaid applicant is married, the countable assets of both the community spouse and the institutionalized spouse are totaled as of the date of “institutionalization,” the day on which the ill spouse enters either a hospital or a long-term care facility in which he or she then stays for at least 30 days. This division of assets” process is undertaken in Missouri, but not Illinois. In Illinois, they look at the combined assets of both spouses as of the date of application. (This is sometimes called the “snapshot” date because Medicaid is taking a picture of the couple’s assets as of this date.)
In order to be eligible for Medicaid benefits a nursing home resident may have no more than $2,000 in assets It’s $2,000 in Illinois. It’s only $1,000 in Missouri (an amount may be somewhat higher in some states). In general, the community spouse may keep one-half of the couple’s total “countable” assets up to a maximum of $115,920 (in 2013). Note that there are some important assets that are not countable including most particularly, the couple’s residence. Special rules and special planning considerations apply to it. Called the “community spouse resource allowance,” this is the most that a state may allow a community spouse to retain without a hearing or a court order. The least that a state may allow a community spouse to retain is $23,184 (in 2013).
Example: If a couple has $100,000 in countable assets on the date the applicant enters a nursing home, he or she will be eligible for Medicaid once the couple’s assets have been reduced to a combined figure of $52,000 — $2,000 for the applicant and $50,000 for the community spouse.
In Missouri, the number would be $50,000.00 rather than $52,000. However, it must be carefully noted that these results in either state, are those that will occur without planning. With the benefit of timely planning with which we can assist clients, it is often possible for a married couple to keep everything, or close to it, either in the form of assets or in the form of additional income.
Some states, however, are more generous toward the community spouse. In these states, the community spouse may keep up to $115,920 (in 2013), regardless of whether or not this represents half the couple’s assets. This is true in Missouri, but not in Illinois. In Illinois, the spouse gets to keep all assets up to $109,560.00 but not more without a hearing or a court order. For example, if the couple had $100,000 in countable assets on the “snapshot” date, the community spouse could keep the entire amount, instead of being limited to half. This is Illinois, except they rolled it back to 109,560.00 and will not be indexed to Social Security increases as it is in other states.
In all circumstances, the income of the community spouse will continue undisturbed. The spouse will not have to use his or her income to support the nursing home spouse receiving Medicaid benefits. This is true in Missouri. However in Illinois, a portion of the income of the community spouse in excess of $2793.00 per month must be contributed towards the cost of the institutionalized spouse’s care. But what if most of the couple’s income is in the name of the institutionalized spouse and the community spouse’s income is not enough to live on? In such cases, the community spouse is entitled to some or all of the monthly income of the institutionalized spouse. How much the community spouse is entitled to depends on what the Medicaid agency determines to be a minimum income level for the community spouse. This figure, known as the minimum monthly maintenance needs allowance or MMMNA, is calculated for each community spouse according to a complicated formula based on his or her housing costs. The MMMNA may range from a low of $1,891.25 to a high of $2,898 a month (in 2013). That’s true in Missouri. Illinois automatically allows the community spouse a maximum of $2793.00 per month, and has locked in that figure so that it will not increase in the future years. If the community spouse’s own income falls below his or her MMMNA, the shortfall is made up from the nursing home spouse’s income.
Example: Mr. and Mrs. Smith have a joint income of $3,000 a month, $1,700 of which is in Mr. Smith’s name and $700 is in Mrs. Smith’s name. Mr. Smith enters a nursing home and applies for Medicaid. The Medicaid agency determines that Mrs. Smith’s MMMNA is $2,000 (based on her housing costs). Once again, this is true in Missouri, but not in Illinois. In Illinois, she would get to keep $2793.00 and he $30.00. As to the other $177.00, if Mr. Smith has Medicare supplement or other health insurance, that amount could first be applied to pay monthly health insurance premiums rather than the nursing home. Since Mrs. Smith’s own income is only $700 a month, the Medicaid agency allocates $1,300 of Mr. Smith’s income to her support. Since Mr. Smith also may keep a $60-a-month personal needs allowance (The personal needs allowance is $30/month in Illinois and $40/month in Missouri),his obligation to pay the nursing home is only $340 a month ($1,700 – $1,300 – $60 = $340).
In exceptional circumstances, community spouses may seek an increase in their MMMNAs either by appealing to the state Medicaid agency or by obtaining a court order of spousal support. However, the availability of this relief has been severely limited in Missouri based on two fairly recent appellate court cases.
