Medicaid Assistance Long-Term Care for Married Couples in Maryland
By: Jeffrey D. Katz, Esq., Managing Partner, JDKatz
When a married couple is faced with one spouse needing long-term nursing home care, the costs can quickly become overwhelming. With monthly bills topping $10,000 in many cases, few families have the resources to cover expenses for long. While Medicare provides little long-term support, Medicaid can supply the financial assistance couples desperately need. However, for married applicants, navigating Medicaid’s complex rules and eligibility criteria can be confusing and feel like an uphill battle. This guide will outline key strategies married couples can use to improve their chances of successfully qualifying for Medicaid long-term care coverage. With proper planning and preparation, you and your spouse can work as a team to overcome obstacles and win approval for the essential benefits that enable quality care. Let’s review how to tackle this process together while protecting your assets and avoiding common pitfalls.
United, married couples can map out an effective game plan to reach the Medicaid end zone.
Spousal Impoverishment Rules
- The Medicaid program has special rules to prevent a healthy spouse from being impoverished when their husband/wife needs nursing home care. This impacts eligibility calculations.
- Monthly income of the institutionalized spouse is split – a personal needs allowance is deducted, then the remaining amount is divided between the spouses.
- A portion of a couple’s joint resources can be protected for the community spouse. The limit is $137,400 in 2023.
- Strategically allocating resources and income benefits the healthy spouse while still meeting eligibility thresholds.
Resource Allocation
- Married couples must carefully assign ownership of resources like bank accounts, investments, etc. to each individual spouse when applying.
- Appropriate allocation of resources is essential to meet Medicaid’s asset limit for the institutionalized spouse.
- An experienced elder law attorney can help properly divide and document assets between spouses. Any errors could compromise eligibility.
Income Sharing
- A specific formula determines the minimum monthly income that must be allocated to the community spouse from the institutionalized spouse’s monthly income.
- All calculations used to arrive at each spouse’s respective income allowance must be provided and verified.
- Complex rules exist around what constitutes countable versus excluded income for each spouse.
- Documentation requirements are extensive to substantiate incomes and any permissible deductions.
Home Equity
- Medicaid permits the healthy spouse to remain in the couple’s home under certain conditions. However, home equity value over $955,000 is countable.
- Strategically utilizing home equity exemption, fair market value assessments, reverse mortgages and more may be required to deal with excess home equity issues.
- Our office routinely identifies and can help appropriately apply exceptions to handle home equity while still qualifying.
Division of Assets
- Married couples often must re-title countable assets solely in the name of the community spouse to meet eligibility guidelines.
- This division of assets must be executed very carefully to avoid penalties for transfers at below fair market value.
- How assets are divided can impact ongoing eligibility and create recovery issues after the Medicaid recipient passes away.
In summary, married couples have to navigate numerous complex regulations and calculations that individuals don’t face. Professional legal guidance is hugely beneficial to successfully coordinating all these moving parts.
Maryland Specific Factors
Here are some key Maryland-specific Medicaid rules and provisions that apply when married couples seek long-term care coverage:
- Maryland uses an income cap of $2,523/month and a resource limit of $2,500 for Medicaid long-term care eligibility.
- For the community spouse resource allowance, Maryland follows the federal minimum of $27,480 and a maximum of $137,400 in countable assets.
- The maximum monthly maintenance needs allowance for the community spouse in Maryland is $3,435 in 2023.
- Maryland allows the community spouse to retain the couple’s primary residence without impacting Medicaid eligibility, with some exceptions.
- Maryland also follows federal guidelines for home equity limits. Equity value over $955,000 makes an applicant ineligible without adequate long-term care insurance.
- Maryland does not have a medically needy Medicaid program, which provides more flexibility for spend-down strategies when over asset limits.
- Maryland allows Medicaid eligibility to be backdated up to 3 months to cover past nursing home bills if all criteria were met at the time.
- Maryland allows for spousal refusal, so the healthy spouse is not required to contribute their income to the cost of nursing home care if certain steps are followed.
- Maryland expanded the look-back period for asset transfers that could incur Medicaid penalties to 60 months in 2020.
- Maryland uses an enhanced life estate deed approach to protect property transferred to certain beneficiaries.
It is essential to get advice PRIOR to filing, to ensure qualification, and the maximum spousal maintenance needs allowance is granted. Our attorneys are well-versed in Maryland’s Medicaid regulations and can facilitate your application and approval when planning for long-term care as a couple. The intricacies of the rules can make or break one’s eligibility.
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