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Married Couple Medicaid Redetermination Challenges – Part 2

Last week I started talking about Medicaid’s redetermination process.  Pretty much every county Medicaid office is now sending out annual redetermination notices.  As I said last week, married couple cases can be especially tricky.  That’s because even after Medicaid is approved, the healthy spouse must keep certain rules in mind.

Let’s first review some of the Medicaid rules.  In order to qualify for benefits in the case of married couple where only one applies for benefits, the countable assets are totaled as of the first day of the first month of continuous institutionalization – known as the snapshot date.  The assets are then divided in half and the non-Medicaid or community spouse can keep ½ but only up to a maximum of $128,240 (in 2020).  That is known as the Community Spouse Resource Allowance (CSRA).  The Medicaid spouse must have no more than $2000 in assets to his/her name.

I explain this to clients and repeat it many times during the course of the spend down process leading to Medicaid and again during the Medicaid application process.  What people tend to focus on is the first part but not the second.  I mean that clients focus on the target number they need to get to for Medicaid eligibility but not the part about how much of that amount must be in each spouse’s name.

Why does that happen so often?  Because families can be quite overwhelmed by all the rules and documents that we require them to track down.  I think it becomes information overload and they push this one piece of information to the back of their mind.

When Medicaid issues its approval, the State lists the assets that the community spouse can keep as part of the CSRA.  At that time I again remind the community spouse that the Medicaid spouse must be removed from ownership of these accounts.  If not, then these accounts will count towards the $2000 limit and the Medicaid spouse can lose eligibility.  Medicaid rules provide 90 days for the removal of the Medicaid recipient’s name from these assets.

The State does not check on this, however, until the time of a redetermination and that’s when it becomes a real problem.  If the comunity spouse fails to change the ownership and remove the Medicaid spouse’s name, the State is likely to terminate Medicaid at that point.  This results in a loss of benefits until the community spouse complies with the requirement.  A new application in some cases may need to be filed as well.

Another pitfall involves the checking account.  Most married couples have a joint checking from which they pay their bills.  From time to time that account can exceed $2000.  We counsel clients to open a separate checking account in the community spouse’s name which then becomes the “operating account” from which the bills should be paid.  Usually the joint checking must remain open to have a place to deposit the Medicaid spouse’s Social Security and pension.  We instruct the community spouse, however, to transfer that income from the joint account to keep the Medicaid spouse under $2000.

As I have written previously, it is easy and understandable to relax a bit after the stress of getting thru the Medicaid application process to reach approval.  But, if you don’t stay on top of it and follow the rules you can very easily lose the benefits you worked hard to qualify for and every month of benefits lost means a month the community spouse will have to pay at the private pay rate from the CSRA assets that he/she was expecting to be able to keep.