By Ronald Fatoullah and Stacey Meshnick
As our population ages, a greater number of individuals will require long-term care. A well spouse is deemed to be a relative who is legally responsible for the expenses of an ill spouse requiring long-term home care or nursing home care. As such, clients seeking long-term care for a sick spouse are usually concerned about spending down assets and the possibility of becoming impoverished.
For people who do not have long-term care insurance, inadequate insurance, or do not feel they have enough assets to cover care on a long-term basis, Medicaid is a potential option. The laws pertaining to Medicaid provide protections for well spouses who have up to $3,853.50 in monthly income and $154,140 in assets. However, there are many spouses with income and assets above the allowable levels. In New York State, a sick spouse can obtain Medicaid benefits irrespective of the well spouse’s income and/or assets if the well spouse refuses to contribute financially towards care by submitting a “spousal refusal” with the Medicaid application.
However, when a spousal refusal is executed, the Medicaid agency has the right to recover from the well spouse all funds spent on the ill spouse’s care. There has been an increase in the number of spousal refusal applications and an increase in attempts by local Medicaid agencies to recover funds from the well spouse. The increase in attempts at recovery highlights the need to have an experienced elder law attorney prepare and submit Medicaid applications any time a spouse is involved.
Once a spousal refusal is signed and care is in place, Medicaid has the right to request reimbursement from the well spouse. It is important to note that the reimbursement is based on the Medicaid rate for care rather than the higher private rate for care. For example, a nursing home may charge $500 a day privately, while the Medicaid rate is $300 daily. Hence, if a spouse must repay Medicaid, it will be less than he/she would have paid privately. Further, an attorney can often negotiate with the Medicaid agency to reduce the spouse’s liability based upon several factors, including the well spouse’s age, health, expenses, etc.
If faced with an immediate need for nursing home placement, a Medicaid application with a spousal refusal is typically the obvious choice. However, if there is time to plan, there are preferred strategies that can reduce or eliminate the chance of Medicaid recovery. Most of the strategies can provide a win-win scenario for the spouse, the facility and Medicaid as well. The spouse will have the comfort of knowing that she/he may reduce or eliminate the chance of spousal recovery and the facility will have the confidence of knowing that they will be paid, i.e., that Medicaid eligibility will be granted.
This blog posting is for informational and educational purposes only. It is general in nature and not person or circumstance specific. This blog posting is not intended nor should it be construed as rendering independent investment, legal or tax advice. It may but does not necessarily constitute attorney advertising.