When one spouse needs long-term care and the other remains in the community, many families worry about losing their savings or home to pay for care. Fortunately, Medicaid provides protections for the community spouse (the spouse not in a care facility) through the Spousal Needs Standard. This set of rules ensures that the community spouse can maintain a certain standard of living while the institutionalized spouse receives Medicaid benefits for long-term care.
Below, we’ll explain how the Spousal Needs Standard works and what it means for Utah families.
What is the Spousal Needs Standard?
The Spousal Needs Standard, sometimes referred to as spousal impoverishment protections, is a Medicaid provision designed to prevent the community spouse from becoming financially destitute while the other spouse is receiving Medicaid-funded long-term care. It allows the community spouse to keep a portion of the couple’s income and assets to meet their living expenses.
This provision is particularly important in Utah, where long-term care costs can quickly deplete a couple’s joint resources. By allowing the community spouse to retain certain resources, Medicaid helps protect the financial well-being of both spouses.
Key Components of the Spousal Needs Standard
- Minimum Monthly Maintenance Needs Allowance (MMMNA) The MMMNA is the minimum amount of income that Medicaid allows the community spouse to keep for living expenses. If the community spouse’s income falls below this threshold, they may be able to divert some of the institutionalized spouse’s income to meet their needs.
In Utah, the MMMNA is set by federal guidelines and adjusted annually to account for changes in the cost of living. It typically covers essential expenses such as:
- Housing costs (rent or mortgage)
- Utilities
- Food
- Transportation
- Medical care
If the community spouse’s income is already above the MMMNA, they may not be entitled to divert any of the institutionalized spouse’s income. However, if their income is below this threshold, they can receive a portion of the institutionalized spouse’s income to help meet their monthly living expenses.
- Community Spouse Resource Allowance (CSRA) The CSRA is the amount of assets that the community spouse is allowed to keep without affecting the institutionalized spouse’s Medicaid eligibility. Medicaid typically counts the couple’s combined assets when determining eligibility but allows the community spouse to retain a portion of these assets.
The CSRA is also determined by federal guidelines and is adjusted annually. In Utah, the community spouse can retain up to a certain limit of countable assets, such as:
- Bank accounts
- Investments
- Retirement accounts
- Real property (other than the primary residence)
Assets that are typically excluded from this calculation include:
- The couple’s primary residence (if the community spouse continues to live there)
- One vehicle
- Personal belongings
- Income-First Rule Utah follows the “income-first” rule, which means that before the community spouse is allowed to retain more than the standard asset allowance, the institutionalized spouse’s income must first be transferred to the community spouse to meet the MMMNA.
Protecting Your Assets: Planning for Long-Term Care
Navigating Medicaid’s rules, including the Spousal Needs Standard, can be complex. Without proper planning, you could risk losing more assets than necessary to long-term care costs. By working with an experienced elder law attorney, you can take steps to protect your assets while ensuring that your spouse receives the care they need.
Planning strategies include:
- Medicaid Compliant Annuities: These financial products can convert a large portion of the couple’s assets into income for the community spouse, protecting those funds from Medicaid spend-down requirements.
- Trusts: Establishing certain types of trusts may also allow you to preserve assets for the community spouse or other family members.
Get Help Navigating Medicaid’s Spousal Needs Standard
Understanding Medicaid’s Spousal Needs Standard is essential for protecting your family’s financial future while ensuring that your spouse receives the care they need. If you have questions about how the Spousal Needs Standard applies to your situation or need help planning for Medicaid eligibility, the team at Ellsworth Law Firm is here to assist.
Contact us today at 801-210-2829 or visit our office in Lehi, Utah, to schedule a consultation. We can help you navigate the complex Medicaid rules and ensure that both you and your spouse are protected.
