Spousal Refusal allows the spouse living in the community to refuse to use his or her assets in calculating the eligibility of the spouse applying for Medicaid long term care. If one spouse requires nursing home care, the community spouse does not need to spend down all of his or her assets and become impoverished paying for care.
All Medicaid applicants must meet certain income and asset requirements in order to be eligible. The good news is that in New York, there are certain exemptions to the eligibility requirements where the individual requiring a nursing home has a spouse still residing in the community who depends on the joint income and assets to pay expenses. For that reason, the Medicaid program allows certain spousal allowances.
For instance, if there is a spouse living in the community, that spouse is entitled to keep up to $3,259.50 in combined income after payments of medical premiums. What this means is that where you have a married couple and one spouse requires Nursing Home care, the community spouse can keep his or her income and as much of the institutionalized spouses income to bring them up to $3,259.50 monthly.
In addition, although applicant are not permitted to have more than $15,900.00 in their name at the time of application (not including certain exempt retirement accounts, and an irrevocable pre-paid burial) the community spouse is permitted to keep $130,380.00 in liquid assets plus a home.
Under New York Medicaid Law, community spouses’ with assets exceeding $130,380.00 have the option of signing a “spousal refusal” and, so long as that document is timely filed with the application, the Medicaid agency will determine eligibility for the institutionalized spouse without considering the assets or income of the community spouse. Assuming a spousal refusal is signed, the community spouse can maintain significantly more assets in his or her name without affecting the eligibility of his or her spouse.
This is a particularly important provision of the law when planning for Nursing Home Care for an individual with a spouse in the community. Many of our clients are surprised to learn that transfers of assets can be made to the community spouse, and that the traditional five year look back does not apply. In practice, what this means is that when faced with a crisis, planning can be done in month one and the spouse in need of care can be eligible for Medicaid the following month. In closing, although pre-planning is always the preferred method, Medicaid planning can be done at virtually any point in the process, ensuring that your loved one receives the care that he or she needs while minimizing the financial impact on your family.