What is a Community Spouse in Medicaid world? We posed this question to Hailey Michel-Evleth, one of the public benefits specialists at Elder Law of East Tennessee, a Life Care Planning Law Firm with offices in Knoxville and Johnson City, Tennessee.
The concept of a Community Spouse applies to married couples where one spouse needs Medicaid to pay for nursing home care and the other one doesn’t. “You're considered part of their household and referred to as the Community Spouse during the application process,” Hailey said.
Medicaid’s strict asset and income requirements effectively impoverish an elder who needs nursing home care, which can have serious implications for the healthy spouse. Each state allows the Community Spouse to protect certain assets and income. “In Tennessee, the protections are conservative, so qualifying one spouse for Medicaid can still create a financial burden for the Community Spouse,” Hailey noted.
Families who attempt to qualify for Medicaid on their own often make mistakes during the application process that can have devastating consequences for the Community Spouse. One of the most common involves relying on the nursing home for guidance during the Medicaid qualification process, which means families miss out on the special protections that the law gives to Community Spouses. Families often end up spending down more than necessary. In Tennessee in 2021, a Medicaid applicant may keep a minimum of $26,076 and a maximum of $130,380 (these numbers change annually). When people apply on their own or they rely on advice from a nursing home, they often spend down to the minimum without realizing that they could have kept more.
Another common mistake results in unnecessary reductions to income. By law, a Community Spouse in Tennessee can have at least $2,155 a month in income. “If the Community Spouse’s income is less than $2,155, the Community Spouse can keep some of the Medicaid applicant's income to bring their income up to the minimum,” Hailey advised. If the applicant’s income is extremely low, the Community Spouse can even keep some of the applicant’s assets, but you have to appeal the application to achieve this result.”
Hailey has dozens of horror stories about families who resisted help and ended up paying the price. In one case, the Community Spouse was a husband who spent $400,000 on nursing home fees in a misguided attempt to spend down assets. In another case, a husband in the nursing home used his entire income to pay for care, leaving his wife, the Community Spouse, unable to pay the mortgage on her home. In these cases, The Community Spouses didn’t know that they could go before the judge and demonstrate that they should be able to keep more of their assets and get a larger spousal allocation.
Working with a Life Care Planning Law Firm can help families avoid the multiplier effect of bad decisions. “The Medicaid application for a married person will always be more complicated,” Hailey explained. “Because we’ve done so many applications, we know what we’ll need to be successful. We can see more ways to preserve assets from needless spend down while protecting the Community Spouse from estate recovery.”
Working with a Life Care Planning Law Firm also gives Community Spouses a peace of mind that’s especially valuable in this age of COVID. “There’s so much stress,” Hailey added. “Trying to manage a Medicaid application can be the straw that breaks the camel's back. When families work with us, we relieve all those worries.”