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Medicaid Redeterminations – Part 4

In this week’s blog post I continue my discussion on Medicaid’s annual redetermination process and the changes that can cause problems with achieving a renewal.  In the case of a married couple where only one spouse has been approved for Medicaid, the non-Medicaid or “community spouse” is entitled to keep a home if residing in it and as much as $154,140 in other countable assets.  But, what happens if the healthy spouse dies first?

As I have written in the past, one thing the community spouse should do is change his/her will so as not to leave everything to the surviving spouse who is now on Medicaid.  These assets will certainly cause the surviving spouse to exceed Medicaid’s strict asset limit of $2000.  But there also is a New Jersey law called the elective share that entitles the surviving spouse to a minimum of 1/3 of the deceased spouse’s estate.  

Medicaid requires that the spouse assert his or her right to the elective share.  Failure to do so results in a Medicaid penalty.   A right by law not exercised is no different in the eyes of Medicaid than giving money away.  Both are transfers for less than fair value.

On the other hand, asserting the elective share is problematic because New Jersey’s statute is complicated and not very well understood by Medicaid.  Miscalculating it can cause an interruption in Medicaid benefits.  I’ll explain what I mean next week.