Medicaid’s Community Spouse Resource Allowance: Protecting a Spouse’s Assets

Summary
When a married person applies for long-term care Medicaid, there are financial implications for both spouses as Medicaid sets a very low limit on the amount of assets a couple can have regardless of in whose name an asset is held. To prevent a non-applying spouse from becoming financially impoverished, Medicaid allows that spouse to retain a much larger portion of the couple’s assets. This is called the Community Spouse Resource Allowance.

 

How Medicaid’s Community Spouse Resource Allowance Works?

Specific financial requirements must be met to be eligible for long-term care Medicaid. There is a limit on the amount of assets an applicant can possess, and if married, those limits include a spouse’s assets.

When an individual begins receiving long-term care in a nursing home, it is assumed they no longer personally need many assets as Medicaid will pay for the vast majority of the care and living expenses. While the limits vary by state, the asset limit for someone entering long-term care in 2022 is between approximately $1,600 and $15,500. This means that the person entering long-term care does not qualify for Medicaid if they have over this amount in assets.

In cases where the person applying for long-term care, Medicaid is married, and their spouse is NOT applying for Medicaid, the non-applicant spouse needs resources to continue to live in the community. For this reason, the non-applicant spouse is allowed to retain much more of a couple’s assets. How much depends on that state in which they reside. In most states in 2022, a non-applicant spouse can retain up to $137,400. This higher asset limit is called the Community Spouse Resource Allowance (CRSA). How the actual dollar amount is calculated is complicated and will be discussed further along in this article.

 Did You Know? A similar rule exists regarding the income of the community spouse. This rule is called the Minimum Monthly Maintenance Needs Allowance (MMMNA).

 

What Assets are Counted and Exempt for the CSRA?

Some assets of a married couple are excluded from being counted towards CSRA. Countable assets are assets that are considered liquid (easily turned into cash). The government assumes that if a couple has liquid assets, those assets could be used to pay for long-term care. Examples of countable assets include:

– Cash
– Certificates of deposit
– Stocks
– Bonds
– Vehicles other than a primary vehicle
– Vacation properties including timeshares
– RVs / motorhomes
– Life insurance policies (the cash value if over $1,500 in most states)

Non-countable assets will not impact long-term care Medicaid eligibility. Examples of non-countable assets include:

– The couple’s primary home (provided the community spouse still lives there)
– Household furniture and appliances
– Clothing
– Primary automobile
– Irrevocable funeral or burial trust (a trust that cannot be changed)
– Life insurance policies under a certain amount (usually $1500)

 IRAs and 401(k)s may countable or exempt assets depending on your state laws.

 

Minimum and Maximum Community Spouse Resource Allowance Amounts (2022)

The dollar amounts to which a community spouse is entitled vary by state. The federal government sets absolute limits and states set their own limits with the range allowed by the federal government. For 2022, the federal government has set a minimum resource limit of $27,480 and a maximum resource limit of $137,400. This means no state can have a minimum CSRA less than $27,480, and no state can have a maximum CSRA more than $137,400. So, for example, a state cannot say a community spouse can only keep $10,000 in assets because community spouses must be allowed to retain at least $27,480.

 

How to Calculate the Community Spouse Resource Allowance

To determine a couple’s assets, Medicaid will use what the couple has on a specific date. This date is called the “snapshot” day. Generally, the snapshot day is either the first day of the applicant spouse’s institutionalization or the date they qualified for Medicaid long term care. On the snapshot day, all of the countable assets owned by either spouse are added up. It doesn’t matter whose name a given asset is in; all assets are considered jointly owned.

States vary on the next step in the calculation. In many states, the total assets of the couple are then divided in half. The community spouse is only entitled to keep assets up to half of the total provided it falls within the range of the Minimum and Maximum figures discovered in the previous section. These states are sometimes referred to as 50% states. Some states do not limit the community spouse to only 50% of the assets. Instead, these states allow the spouse to keep all of the couple’s assets up to the state’s CSRA limit. These states are called 100% states.

Example: A couple lives in a 50% state. The couple’s countable assets totaled $100,000. In their state, the community spouse is allowed a maximum CSRA of the federal limit, $137,400. Rather than being able to keep all $100,000 in assets, the state will only allow the community spouse to keep up to half of the total assets. The community spouse would have a CSRA of $50,000.

Example: A couple lives in a 100% state. Their countable assets total $100,000, and their state has a maximum CSRA of $137,400. In this example, rather than only being allowed to keep half, the community spouse would be entitled to keep all of the couple’s countable assets up to the state’s limit. The community spouse in this example would keep the full $100,000.

 

Table: 50% and 100% States for Medicaid Community Spouse Resource Allowance

Medicaid 50% and 100% States for Community Spouse Resource Allowance – Updated Feb. 2022
50% States 100% States
Alabama
Arizona
Arkansas
Connecticut
Delaware
Idaho
Indiana
Iowa
Kansas
Kentucky
Maryland
Massachusetts
Michigan
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Dakota
Tennessee
Texas
Utah
Virginia
Washington
Washington DC
West Virginia
Wisconsin
Alaska
California
Colorado
Florida
Georgia
Hawaii
Illinois
Louisiana
Maine
Minnesota
Mississippi
South Carolina
Vermont
Wyoming