Preventing Spousal Impoverishment
The expense of nursing-home-level care — which varies based on location and can range from $6,500 to $10,000 a month or more — can rapidly deplete the lifetime savings of elderly couples, leaving one or both of them impoverished. Provisions to help prevent Spousal Impoverishment were enacted by Congress, through the Medicare Catastrophic Coverage Act of 1988. The intent of the provisions is to protect the financial situation of married couples, when one spouse requires extended care in a medical institution, a nursing facility, or through home and community-based services. The provisions help ensure that spouses living in the community, who do not need Medicaid, have sufficient income and assets to live out their lives with independence and dignity.
Prior to passage of the Medicare Catastrophic Coverage Act, many spouses of nursing-home-level care patients were forced to consider divorce as their only means of retaining sufficient assets and income to continue living independently. Many women were left with only their social security income and were forced to spend nearly all of their savings for a spouse’s nursing home care. That’s why this phenomenon became known as “Spousal Impoverishment.”
Under the Medicaid Spousal Impoverishment Provisions, a certain amount of the couple’s combined resources is protected for the spouse living in the community. Depending on the circumstances, a certain amount of income belonging to the spouse in the institution or receiving long-term-care services in the home also can be set aside for the community spouse’s use. The provisions regarding protection of resources can vary from state to state. Some states require that one spouse be in an institution in order to take advantage of Spousal Impoverishment Provisions.
The ND Policy Manual, .nd.gov/dhs/policymanuals/51003/Content/Resources/Images/SC%20510-05.pdf, can be considered a primary resource on spousal impoverishment for residents of North Dakota. If you care to look it up yourself, the section on “Spousal Impoverishment” begins on p. 208. (See Glossary below for help in navigating the legal jargon.) Because the law and its financial components are complex, if you are seeking to avoid Spousal Impoverishment, we recommend that you contact an Elder Law Attorney who handles preservation &/or transfer of assets.
The spouse receiving services has to be screened and determined to be at a nursing-home-level of care. There is sometimes confusion when we talk about Spousal Impoverishment Provisions in relationship in-home and community-based services (HCBS), because some people think they can only use them when care in a nursing home is required. That is not true in the state of ND.
Spousal Impoverishment has a financial assets component, and to take advantage of it you must complete an asset assessment. When considering eligibility, the value of any assets owned jointly and individually are considered. Once asset-eligibility has been determined, then the dollar amount that each spouse can retain above the cost of care will be determined, based on the provisions of the Act and of the state in which the couple resides. Of special interest may be the fact that Medicaid does not include as an asset the home the community spouse or the spouse receiving HCBS services lives in. But once it is empty, for example if both parties move permanently into a nursing home or an apartment, it is considered an asset.
This Fact Sheet from the North Dakota Department of Human Services includes additional information about qualifications, asset assessment and frequently asked questions and answers: https://www.nd.gov/dhs/info/pubs/docs/medicaid/fact-sheet-medicaid-spousal-impoverishment.pdf.
If you think that the care you or a loved one is receiving from DTN Home Care might be subject to Spousal Impoverishment Provisions, please contact us.
Glossary: Definitions for Spousal Impoverishment Provisions
- “Home and Community Based Services (HCBS) Spouse” means an individual who requires care of the type provided in a nursing facility, but who chooses to receive HCBS in the home.
- “Community spouse” means the spouse of an institutionalized spouse or a Home and Community Based Services (HCBS) spouse who is:
- Not financially responsible for a child who is in receipt of Medicaid
- Not in receipt of Medicaid other than coverage under the Medicare Savings Programs
- Not requiring care in a medical institution or a nursing facility
- “Family member” means only minor or dependent children, dependent parents, or dependent siblings of the institutionalized or HCBS patient who are residing with the community spouse.
- “Institutionalized spouse” means an individual who requires care in a medical institution, and is likely to be in the facility for at least thirty consecutive days.
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- Tagged: community spouse, extended care, HCBS spouse, Medicare Catastrophic Coverage Act, prevent spousal impoverishment, protect elderly assets, spousal impoverishment, spousal impoverishment provisions