MEDICAID FOR MARRIED
COUPLES
(in
Connecticut!)
Lisa Nachmias Davis
Davis O'Sullivan &
Priest LLC - Attorneys at Law
davis@sharinglaw.net ~ www.sharinglaw.net
(revised 1-22-26)
USE WITH CAUTION. In almost every
case it is essential for a married couple residing in Connecticut to
consult an experienced
Connecticut elder law attorney when Medicaid eligibility seems
necessary. Rules have exceptions and work-arounds. Never
assume the worst. This
article is a brief summary of the complex rules that the attorney will
apply to ensure that the outcome is the most favorable for the
couple.
Under federal law, when one
spouse is residing in a long-term care facility for 30+ days, or
requires comparable care at home under a "home care" Medicaid program,
the assets of both spouses are considered available, but the spouse not
receiving care, called the "community spouse," is entitled to so-called
"spousal impoverishment protections." These can be used to the
advantage of the community spouse, but usually require legal help. In
general, the spouse in the nursing home or who needs home care is not
eligible for Medicaid
until the first of the month by the end of which the combined,
non-exempt assets of both spouses are reduced to permitted levels
--$1,600 (net that month's income) plus the "CSPA" described
below. (Exceptions to the rules in this article may apply for someone
under 65 in a nursing home, where Husky D may be an option (CLICK if the person is under 65),
or if the person is in a "residential care home" rather than a nursing
home (CLICK!); also, even if
"eligible" for care at home, no care is actually provided/paid for
until all the documentation is complete, which can be much later.)
1.
Exempt Assets. If occupied by the "community spouse," the
home is protected, no matter its value. It does not have to be
sold. No lien is placed on the
home. Even if
the spouse receiving care dies and his/her name is on the deed at
death, the
State will not take the home. Also, one car of any value is
allowed when there is a community spouse. These are the big two,
but there are other "exempt assets" -- click
for my article on this.
2.
Assets of BOTH SPOUSES Count BUT
ONLY AT THE TIME OF APPLICATION. Putting assets into
the name
of one spouse does not mean the other spouse qualifies for
Medicaid. The State wants to know about the assets of EITHER or
BOTH spouses. This means that the community spouse MUST
provide
information about his/her assets and all transactions for the prior 5
years. This can create headaches when couples are separated or
don't share financial information. (For federal purposes, there is only
"married" and "divorced" - nothing in between.) It doesn't
matter if the spouses kept everything separate, filed separate
tax returns, etc.
3. The INCOME of the community
spouse has no negative effect on the other spouse's eligibility. The community spouse could have a very high
income and the other spouse could still qualify for long-term care
Medicaid. (To qualify for nursing home care benefits,
it won't matter how much income the institutionalized spouse receives,
but to qualify for home care, a pooled
trust is needed if the income of the person applying is over $2982 (changes annually) before
deductions.)
4. Transfers BETWEEN Spouse are
Exempt. Because assets
of both spouses count, gifts
between spouses create no problems (at least up until a
reasonable time after the ill spouse qualifies for Medicaid, usually,
by the next year's "redetermination" comes due). The 5-year lookback does not apply. It is a
good idea, if possible, to transfer title into the name of the
community spouse, and doing so is totally OK. Unfortunately, to
transfer an IRA to the other spouse means cashing it out first, which
can create a big tax liability (and if the spouses file taxes jointly,
an increased Medicare premium later on).
5. Minimum Monthly Needs
Allowance ("MMNA"). Federal
law sets up a formula that computes what the community spouse "needs"
to live without poverty, and the Medicaid rules are supposed to ensure
that the community spouse has at least this much income. In 2026, this
"need" is capped at
$4,066.50/month (changes annually), and could be less. Only
certain
actual expenses are factored in -- mortgage, taxes, condo payment,
rent, insurance. (The state also uses a flat figure
for utility expenses.) If the
income of the community spouse
is not enough for his or her "MMNA," income of the other spouse --
known as the "institutionalized spouse" -- can be given to the
"community spouse" rather than paid to the nursing home as applied
income, which otherwise would be required (see
article on applied income). This is called a Community
Spouse Allowance. If the income of both spouses combined
isn't enough, it's possible
to go to an administrative hearing and ask the State to allow the
community spouse to keep more of the couple's assets so as to generate
investment income to bring the community spouse's income up to this
MMNA, or if $4,066.50 isn't enough because of "exceptional
circumstances" (for instance if
the community spouse is
caring for an adult disabled child or is in assisted living and needs
care there). Also, it may be
possible to get a probate court to order more, and if the procedural
rules are strictly followed, the state must
accept that, but this is very tricky and requires advance planning --
consult an elder law attorney who
knows about the "Valliere" case and do it before applying for anything. If
there are
dependent children at home with the community spouse, the
institutionalized
spouse may also be allowed to pay a "family allowance" for the children.
6. CSPA a/k/a
Community
Spouse Resource
Allowance a/k/a Community Spouse Protected Amount. Federal law sets up a way to decide how much
of the combined assets can be kept by the community spouse. The
state combines the non-exempt assets and divides the value into (1) a
dollar amount that is "protected" for the
community
spouse and does not have to be spent before the other spouse qualifies
for Medicaid (in Connecticut, called the "Community Spouse Protected
Amount"), and (2) everything else that isn't exempt -- and that
therefore must be
reduced
to $1,600 (different figure in other states). Put another way,
the spouse applying won't be eligible until the combined value of
counted assets = CSPA + $1,600. In
7.
Annuities. Assets, which count, can be reduced to
community spouse income, which doesn't count, by annuitizing IRAs or
purchasing a "Medicaid-compliant annuity" also known as a "Lopes"
annuity after a case involving a Mrs. Lopes. This only works if the
money can no longer be taken out in a lump sum but only as a stream of
income
over a period of months or years. Even a "life annuity" may not
work. The annuity must state that it is irrevocable,
non-assignable, and has no cash value. The catch is that the
State MUST be named
as a beneficiary up to the amount of any care provided to the
institutionalized spouse for any payments that remain if the person receiving the payments dies
before the whole thing has been paid back, but only if there is no
minor or disabled child named as beneficiary -- those come first. Most people who don't have a minor or
disabled child beneficiary will want this to pay
back over a short term so that the community spouse can save up the
money and leave it to the children, but if the term is less than 4
years the agency that sells these annuities may have an extra
charge. And if the asset is a
community spouse IRA, that will cause higher income taxes as the IRA
pays out so quickly. Annuities can be fast, but they are not
always the best solution.
8.
Post Eligibility. In general, AFTER the institutionalized
spouse qualifies for Medicaid, the community spouse can (a) have as
many assets as (s)he wants and (b) do what he/she
wants with both assets and income. Exception: (s)he
cannot GIVE
AWAY the house or the proceeds of a reverse mortgage or home equity
loan without potentially causing the institutionalized spouse to lose
eligibility. The house could, however,
be sold, and the proceeds
disposed of! (Of course, any gift may affect the future Medicaid
eligibility of the community spouse.) There is no lien on the
house or assets of the community spouse and when (s)he dies, in
general, no claim of reimbursement against the community spouse's
estate
for the costs of the other spouse's care. (Certain exceptions may
apply.) The community spouse may wish to change his/her will so
that only the statutory minimum -- the right to income on 1/3 of the
probate estate -- is left to the institutionalized spouse. (If
nothing is left to the institutionalized spouse, (s)he is supposed to
claim that amount or face gift penalties,
possibly not if the estate goes to a disabled child, however.)
The
community spouse should also check that any beneficiary designations,
such as insurance beneficiaries, don't name the institutionalized
spouse either. Finally -- if it turns out that the
institutionalized spouse owned something that goes through probate at
death -- no worries, because the state can't claw back anything
when there is a living surviving spouse (unless probate isn't opened
until after the surviving spouse dies) or when a disabled child
outlives the institutionalized spouse.
9. Obligations. If one spouse is actually in a nursing home,
then to the extent that the
income of the institutionalized spouse
is not allowed to be paid to the community spouse for the
"community spouse allowance" or "family allowance," or for health
insurance or medical expenses, that institutionalized spouse's
income must
go to the nursing home as "applied income"
also called "patient liability" for every month or partial month during
which the institutionalized
spouse receives Medicaid. It's like a copay. Failure to pay
applied income may
result in liability to the nursing home, and the nursing home -- unlike
the State -- can sue, put a lien on the house, etc. Also: a
"recertification" form must be filed for the institutionalized spouse,
usually every 6 months or every year after qualification.
Also -- certain debts don't go away just because the other
spouse's income is going to the nursing home. The community spouse may
be stuck with tax bills or other debt payments that were previously
paid out of two incomes. (NOTE: different figures are used when seeking home care, and you might need a pooled trust
if the spouse who needs care has income over $2982/month (2026
figure.)
10. Community First Choice. In
some situations, for instance, if seeking home care but a transfer of
assets occurred within the past 5 years, it may be possible to apply
these same "spousal impoverishment protections" when applying for the
plain vanilla "Husky C" benefit and asking for "community first choice"
as part of the care plan, that is, a personal care assistant. The
problem is that the income limit is likely to be $1370/month, not
$2982. This is a
very specialized situation and requires either a special needs trust or
pooled trust or spending the excess over the cap as a kind of
deductible.
Note: This
information on
USE AT YOUR OWN
RISK. Please
report changes, errors, and suggestions to Lisa Davis.
Lisa Nachmias Davis
Davis O'Sullivan &
Priest LLC - Attorneys at Law