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Medicaid Planning, Spousal Refusal

Clients often believe that an application for Medicaid by a married person always requires the “well” or “community” or non-applying spouse to file a spousal refusal; this is not true. Whether or not a spousal refusal is required depends upon the level of the assets and income of the well spouse. The assets and income of the well spouse is considered available and will count against the eligibility of the spouse applying for Medicaid if the assets and income of the well spouse reach certain levels.

Taking a step back, Medicaid considers the well spouse a “legally responsible relative.” Specifically, it is defined as “a person who is legally responsible for the support and care of one or more relatives. For medical assistance purposes, a legally responsible relative is … a spouse of a medical assistance applicant or recipient i” If the well spouse has assets greater than the community spouse resource allowance (CSRA) and income greater than the community spouse income allowance then Medicaid expects contributions from the well spouse to assist with the costs for the ill spouse. The regulations state, “[a] portion of the legally responsible relative’s income and resources, if he/she is of sufficient financial ability, will be considered available to the MA applicant/recipient [the ill spouse].ii ” 

In 2015 (these amounts generally change each calendar year) the levels of the community spouse resource allowance and the community spouse income allowance are as follows:

Assets: $119,220.00

Income: $2,980.50

House: $828,000.00

I purposely mention the limit of the house because in determining the assets of the well spouse because the primary residence is excluded if the value of the primary residence is $828,000.00 or less.

If a well spouse has a house and money in a bank account totaling $125,000.00, the excess money over $119,220.00 would be counted as assets of the ill spouse unless a spousal refusal is filed. The filing of a spousal refusal with the ill spouses’ Medicaid application requires Medicaid to determine Medicaid eligibility without considering the well spouses assets and income. Specifically, the regulations state, “[t]he applicant/recipient will not be denied MA [Medicaid] if the legally responsible relative refuses or fails to contribute toward the applicant’s/recipient’s medical support. iii”

However, the filing of a spousal refusal does not end the story. Although Medicaid must be determined without considering the well spouses assets and income, the well spouse may be subjecting themselves to claims or lawsuits by the County (Department of Social Services). To be continued ….

Aaron E. Futterman, CPA, Esq. is a partner in the law firm of Futterman & Lanza, LLP with offices in Smithtown, NY and clients throughout Suffolk, Nassau, Queens, Brooklyn, Bronx, Richmond, New York, Westchester and Rockland Counties. He concentrates his practice to Elder Law, Medicaid Planning, Medicaid Applications, Estate Planning, Probate, Estate Taxes, and Estate Administration.

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