Medicaid’s Attempt to Ensure the Healthy Spouse Is Not Impoverished: The CSRA

Medicaid law provides special protections for the spouses of Medicaid applicants to make sure the spouses have the minimum support needed to continue to live in the community while their husband or wife is receiving long-term care benefits, usually in a nursing home.

One of the most important protections is the “community spouse resource allowance” or CSRA. It works this way: if the Medicaid applicant is married, the countable assets of both the community spouse and the institutionalized spouse are totaled as of the date of “institutionalization,” the day on which the ill spouse enters either a hospital or a long-term care facility in which he or she then stays for at least 30 days. (This is sometimes called the “snapshot” date because Medicaid is taking a picture of the couple’s assets as of this date.)

In order to be eligible for Medicaid benefits a nursing home resident may have no more than $2,000 in assets (an amount may be somewhat higher in some states). In general, the community spouse may keep one-half of the couple’s total “countable” assets up to a maximum of $130,380 (in 2021). This is the community spouse resource allowance (CSRA), the most that a state may allow a community spouse to retain without a hearing or a court order. The least that a state may allow a community spouse to retain is $26,076 (in 2021).

Example: If a couple in Michigan has $200,000 in countable assets on the date the applicant enters a nursing home, he or she will be eligible for Medicaid once the couple’s assets have been reduced to a combined figure of $102,000 — $2,000 for the applicant and $100,000 for the community spouse.

In additon to the countable assets (which includes bank accounts, investments, retirement plans,  non-homestead real estate), the married couple may also keep all of the exempt (or non-countable) assets. These include the home and surrounding real esate, one vehicle, pre-paid funeral contracts and certain life insurance policies. 

Many married couples are surprised to learn that they don’t have to “spend down” all their assets in order for one spouse to become eligible for Medicaid. In the above example, the couple could purchase exempt assets, pay off debt and/or take other steps to become eligible for Medicaid benefits. If your spouse or parent is in need of long-term nursing care, and you are interested in knowing more about how Medicaid can help cover the cost , call us for a Long Term Care Planning Consultation. We will review your specific assets and guide you in creating a plan that allows you to keep all the assets you are entitled to.

If you have specific questions about your situation or would like to learn more, reach out to the team at WBH here.

Read more articles:

Using a Roth IRA as an Estate Planning Tool

A Roth IRA does not have to be used as just a retirement plan; it can also be a way to transfer assets tax-free to the next generation. Unlike a traditional IRA, contributions to a Roth IRA are taxed, which means that the distributions are tax-free. Also, unlike a...

Don’t Wait Until You’re Sick to Create an Estate Plan

In the wake of the pandemic, rising inflation, mass shooting tragedies, and other events, more people recognize that they need to plan for the future. Yet while financial planning has been at the top of many Americans’ minds, a vast majority of people have stalled in...

CMS: Medicare Will Soon Cover Certain Alzheimer’s Treatments

Medicare recipients living with a diagnosis of Alzheimer’s recently received promising news: The Centers for Medicare & Medicaid Services (CMS) has announced that it would begin covering new Alzheimer’s treatments that receive approval from the FDA. “If the FDA...

How Do You Choose the Right Person for Your Power of Attorney?

A Power of Attorney is a document that authorizes someone to represent and act on your behalf should you not be in a position to do it. The person you name to act on your behalf is known as the “agent.”  Your agent may need to sign contracts, handle investments, sell...

Social Security Recipients to Get Another Increase in 2023

The Social Security Administration has announced that its beneficiaries will see a significant increase – totaling nearly 9 percent – in their monthly Social Security checks come January 2023. This cost-of-living adjustment (COLA) is the largest boost to Social...

The Tax Consequences of Selling a House After the Death of a Spouse

If your spouse dies, you may have to decide whether or when to sell your house. There are some tax considerations that go into that decision.  The biggest concern when selling property is capital gains taxes.  A capital gain is the difference between the "basis" in...

How Much Should a Trustee Be Compensated?

Serving as a trustee of a trust can be a huge responsibility, so trustees are entitled to compensation for their work. The amount of compensation depends on the type of trustee and the complexity of the trust.  Depending on the trust, a trustee’s duties can include...

Estate Planning for Surviving Spouses

After losing a spouse or longtime partner, it’s difficult to look past your grief. However, it’s crucial to understand the important and timely decisions you must make regarding your finances and personal estate plan. Estate planning is an ongoing process, as it...

When Can Someone Be Declared Legally Incompetent?

If a loved one is experiencing memory loss or suddenly making poor decisions, you may be in a situation where it becomes necessary to ask the probate court to appoint a guardian and/or a conservator for them. This is a complicated process, so we strongly encourage our...

What Not to Include in Your Will

If you are considering preparing a will, this is a great first step in planning for the future. Clients often think that their will is the document that should include all their wishes and provide for the distribution of all their property and funds. That is not the...