My Spouse Is In The Nursing Home - Am I Going to Go Broke?

Paying for long-term care, especially nursing home care, can seem daunting when the cost can be $10,000 to $12,000 per month – or more. When a married couple in Wisconsin is no longer able or interested in privately paying out of pocket for care and they choose to apply for Medicaid, they learn quickly that it’s not a simple process.

Who can apply for Medicaid? A Medicaid applicant is someone residing in a nursing home, a community-based residential facility or an assisted-living facility, or receiving in-home care, who would like public assistance to help pay for their care.

What makes someone eligible to be on Medicaid in Wisconsin? To be eligible for Medicaid benefits in Wisconsin, a single applicant’s asset limit is $2,000 in addition to various “exempt assets.” However, Medicaid law provides special protections for the spouse of a Medicaid applicant – also known as the “community spouse” – to ensure the spouse has the minimum support needed to continue residing at home and to not be financially strapped while the other spouse is receiving long-term-care benefits.
In 1988, Congress enacted the Medicare Catastrophic Coverage Act which includes the Medicaid law that protects community spouses from being forced to utilize all of the couple’s assets on only one of the spouse’s long-term care costs. Those rules are now known as the “spousal-impoverishment rules.” Spousal-impoverishment rules include the community-spouse resource allowance (“CSRA”). In Wisconsin, the CSRA is also known as the community-spouse asset share (“CSAS”). The CSRA/CSAS is the total “countable assets” the community spouse is allowed to keep in addition to the applicant spouse’s $2,000. They may include cash, stocks, bonds, life insurance, cars, tractors, ATVs, UTVs, boats, snowmobiles or any other assets not deemed exempt or unavailable. The community spouse is allowed to keep as much as one-half of the couple’s total countable assets. The most a community spouse is allowed to keep without a hearing or a court order is $157,920. The federal government set a standard in 2022 that the least a state may allow a community spouse to retain is $27,480. Some states are more generous to the community spouse; in Wisconsin, the minimum is $50,000.

When does a couple’s assets get counted? In order to assess if a couple is under the CSRA/CSAS, a couple’s assets are analyzed on a specific date, and this date can affect two major issues:

1. How much money the couple needs to spend, or plan with, before qualifying for benefits, and
2. How much a community spouse is allowed to keep.

This date is called the “snapshot date,” and is when Medicaid is taking a picture of the couple’s assets as of that specific date.
In Wisconsin the snapshot date is one of two dates:

1. The date of “institutionalization” – meaning the date on which the Medicaid applicant enters either a hospital or a long-term-care facility (i.e. a nursing home or assisted living facility), in which he or she then stays for at least 30 consecutive days
2. The date the Medicaid applicant was first determined functionally eligible by the applicant’s local Aging and Disability Resource Center for the home and community-based waivers program. This includes care in a community-based residential facility, assisted-living facility or in-home care.

On the snapshot date, the couple’s total assets is determined, excluding the couple’s house and other “exempt” or “unavailable” assets. After that, the agency determines how much the community spouse can keep according to the calculation of the CSRA/CSAS, as previously described. If the couple’s asset level is over the CSRA/CSAS, this will stop them from qualifying for benefits. They will need to “spend down” assets, or engage in planning to address, the address the excess funds.

Can you give me an example of how this works? Of course! Bill needs nursing-home care. Bonnie is Bill’s wife, so she is Bill’s “community spouse.” Living in Wisconsin, Bill and Bonnie have three possible outcomes based upon their assets on the snapshot date.

1. If Bill and Bonnie have $100,000 or less in assets, Bonnie will be allowed to keep $50,000 – the minimum CSRA – and Bill will be allowed to keep $2,000.
2. If Bill and Bonnie have $200,000 in countable assets, Bonnie will be allowed to keep half of the couple’s assets. Bill will be eligible for Medicaid once their assets have been reduced to a combined figure of $102,000 – $100,000 for Bonnie and $2,000 for Bill.
3. If Bill and Bonnie have more than $315,840, Bonnie will be allowed to keep $157,920 – the maximum CSRA – and Bill will be allowed to keep $2,000.

When the CSRA/CSAS calculation occurs Bill and Bonnie may be told that they have too much money and they need to “spend down” before being eligible for benefits. That would be the case in the above scenarios with the extra 1.) $48,000, 2.) $98,000 and 3.) $155,920. We work with families to create plans that will aid the community spouse in preserving their “extra” assets to maintain their standard of living.
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Proactive planning can help determine the best time to apply for benefits, how to maximize assets the couple is allowed to keep, and how to preserve assets for the community spouse in order to not experience financial hardship paying for long-term care.