The cost of care in a nursing home can devastate the lifetime savings of a married couple. Congress recognized this problem and passed a law in 1988 intended to limit the “spousal impoverishment” that can result when one spouse becomes a nursing home resident.
Under this Medicaid law, minimum amounts of financial resources and income are protected for the spouse who is still living in the community. Those protected amounts are adjusted each year to account for inflation. The adjustments are based on a Labor Department measure of inflation.
What are Community Spouse Resource and Income Allowances?
In general, when your spouse is in a nursing home or needs assistance with home care under a Medicaid Waiver program, he or she will not qualify for Medicaid benefits until your combined financial resources are reduced to a certain level. That permitted level of “available resources” varies depending upon your financial circumstances.
Where one spouse is in a nursing facility, the general rule is that the community spouse can keep ½ of the amount of available resources that were owned by the couple on the date of admission to the nursing facility. However, this standard protected “Community Spouse Resource Allowance,” commonly referred to as CSRA, is subject to a ceiling and a floor.
In addition to being allowed to keep the resource allowance, the community spouse is also entitled to have a certain level of income called the “Monthly Maintenance Needs Allowance,” or MMNA. This income allowance is also subject to a ceiling and a floor. If the community spouse does not have the required level of income, that spouse may be allowed to keep some of the institutional spouse’s income. If the income diverted from the institutionalized spouse is still insufficient, the community spouse may be able to keep additional resources.
What are the Resource and Income Allowances for 2023?
The minimum Community Spouse Resource Allowance for 2023 is $29,724.00, increasing from $27,480.00 in 2022. If a couple has $50,000.00 in available resources, the community spouse could keep the higher of ½ of the resources ($25,000.00) or $29,724.00.
The maximum Community Spouse Resource Allowance for 2023 is $148,620.00, increasing from $137,400.00 in 2022. If a couple has $300,000.00 in available resources, the community spouse could keep the maximum of $148,620.00.
The maximum Community Spouse Monthly Maintenance Needs Allowance is $3,715.50. The minimum Community Spouse Monthly Maintenance Needs Allowance remains the same at $2,289.00 and will be reevaluated on July 1, 2023.
The Community Spouse Resource Allowance is a starting point for planning. A community spouse can typically protect resources far in excess of his or her resource allowance through Medicaid planning techniques such as the purchase of a Medicaid qualifying annuity. (Please consult an experienced elder law attorney before purchasing an annuity for purposes of qualification for Medicaid benefits.)
There are additional planning techniques depending upon your family circumstances.