States which have adopted same sex marriage must now apply consistent rules when a married individual applies for Medicaid benefits for home care, assisted living, or skilled nursing home care. All married persons in such states are now entitled to protection of the couple’s assets through Medicaid’s “spousal impoverishment” rules.
As background, a spouse who is not seeking Medicaid is commonly referred to as the “community spouse,” and the spouse who is seeking Medicaid eligibility is referred to as the “institutionalized spouse.” The Medicaid program is based on both Federal and State law because funding comes from both sources. Medicaid is often the only insurance coverage available to provide long term health care coverage, as many people do not have private long term care insurance.
It is important to note that for married couples, the resources of both the community spouse and the institutionalized spouse, whether owned jointly or individually, are considered together as one resource when determining financial eligibility for Medicaid.
The general rule for a married couple is that the community spouse may keep a certain amount of the couple’s combined resources (for example, in New Jersey, up to one half of all assets, with a maximum of $117,240 in 2014). These rules are state-specific, and change at least annually.
The institutionalized spouse is permitted to keep only $2,000 in most states and, depending on the level of care required, he or she may also need to meet monthly income limits. These monthly income limits generally do not apply to the healthy spouse.
The healthy spouse is also entitled to receive a Minimum Monthly Maintenance Needs Allowance, which is the amount of the institutionalized spouse’s income which the community spouse may keep for living expenses.
Lastly, unmarried individuals (or couples in a Civil Union) who are considering marriage should be aware that a healthy unmarried individual with significant individual assets may be required to spend down such assets when he or she becomes married because the couple’s resources will be counted together, whereas, such spend down would not be required if such individual remains unmarried. It is important to remember that Medicaid rules invoke penalties for transfers of resources that do not fall within a legitimate exception.