Q. My husband may need to go into a nursing home soon, and I fear that the high cost of nursing care will rapidly deplete our savings. Since we do have some savings, would he be ineligible for Medi-Cal?
A. Not necessarily, and this comes as a surprise to most couples. Under a law passed by Congress in 1988 called the Medicare Catastrophic Coverage Act (MCCA), Congress included provisions — sometimes referred to as the Spousal Impoverishment rules — to ensure that the spouse living at home is able to retain sufficient means to live with dignity in the community. It did so by carving out certain protections for the healthy spouse. One of the most important is called the Community Spouse Resource Allowance (CSRA). The CSRA is intended as a kind of “nest egg” for the well spouse, and permits him or her to retain a certain amount of savings and other non-exempt assets without disqualifying the ill spouse for a Medi-Cal subsidy. It might help to think of this CSRA as a special Medi-Cal exemption for married couples.
The amount of the CSRA is indexed to inflation and changes every year. In California, the CSRA amount for 2016 is set at $119,220. In addition, the ill spouse is allowed to retain up to $2,000 in non-exempt assets in his or her name. As a result, between them a couple can keep up to $121,220 in savings, stocks, bonds, and other non-exempt assets, plus exempt assets of any value, such as a home, automobile and IRA’s, and still qualify the ill spouse for a Medi-Cal subsidy.
What if a couple has savings or investments that are above the CSRA ceiling? Can the ill spouse still qualify for a Medi-Cal subsidy? The answer in many cases is yes. Indeed, under the Medi-Cal rules there are a number of powerful strategies that can often be employed to enable a couple with excess resources to qualify for a Medi-Cal subsidy. Some strategies involve converting excess resources into exempt or unavailable assets, while others involve seeking a judge’s order to enlarge the CSRA. Thus, a couple faced with the need to qualify one spouse for a nursing home subsidy should not despair even if their savings are substantial. Instead, they should talk to an elder law attorney familiar with Medi-Cal planning in order to evaluate their options. In many cases, they may be pleasantly surprised to learn that the law protects them, as well, providing they understand the rules.
In another article, I discuss another protection for the well spouse: ensuring that he or she has enough income to meet basic living expenses.