The State of Indiana has published that Indiana nursing home care costs an average of more than $71,000 per year. Fortunately, federal law protects most spouses of nursing home residents from impoverishment. Here are some Indiana’s spousal impoverishment rule features:
- The Spousal Impoverishment Protection Law applies for nursing home admissions occurring on or after September 30, 1989. The purpose of the law is to allow the community spouse [spouse at home] to keep some of the couple’s income and assets while still qualifying the nursing home spouse for Medicaid.
- A snapshot of the couple’s assets is taken in order to determine the community spouse’s share. The snapshot reflects the couple’s assets at the time of the Medicaid applicant’s FIRST continuous (minimum 30 days) institutionalization (nursing facility or hospital).
- When a nursing home spouse is applying for Medicaid, the couple will need to complete a resource assessment tool based upon the resources (assets) owned at the snapshot date AND an application for Medicaid (which asks for information about current resources). The community spouse’s share is calculated from the resource assessment tool. The nursing home spouse’s eligibility is determined from the application. Assets of a married couple are generally considered to be jointly owned, no matter in whose name they have been placed.
- ASSETS: The community spouse is allowed to keep a maximum of 1/2 of the non-exempt assets up to a total of $119,220 (in 2016) or at least a minimum of $23,844 (in 2016).
- The nursing home spouse is allowed only $2,000 in non-exempt assets to be eligible for Medicaid.
- INCOME: The community spouse is allowed to keep all income that is solely in his/her name, plus 1/2 of all jointly owned income. If his/her income does not equal at least $1,992 per month (in 2016), he/she may keep some of the nursing home spouse’s income to get up to the minimum level of $1,992 (in 2016) each month. If the community spouse has high living expenses, he/she may appeal to keep more of the nursing home spouse’s income – bringing his/her total minimum monthly income up to a limit of $2,981 (in 2016).
- The nursing home spouse must contribute all of his/her income towards the nursing home cost except for $52 per month for personal needs and any dollar amounts for health insurance, premiums, taxes, and medical expenses not covered by Medicaid. This contribution of income towards his/her care is called his/her “liability.”
- If the spouse in the nursing home receives more income than $2,199 per month, that person must establish a special trust known as a “Qualified Income Trust” or “Miller Trust” to prevent the excess income from disqualifying the nursing home resident from Medicaid.
- If either spouse has given gifts, sold assets for less than full value, or withdraw cash from bank accounts or savings without keeping receipts for those expenditures within the past 5 years, the state may “penalize” the nursing home resident disqualifying the nursing home resident from Medicaid benefits even if the couple cannot afford to pay nursing home bills.
Qualifying a married person for Medicaid requires careful planning and detailed record-keeping. The State of Indiana prohibits its employees from giving Medicaid eligibility advice and nursing homes only give employees very basic Medicaid training. A botched Medicaid application often costs more than $6,000 to remedy and some couples have lost tens of thousands of dollars because of poor planning and sloppy Medicaid application management. Only experienced elder law attorneys offer solid advice and representation. Experience and expertise really make all the difference!
Jeff R. Hawkins and Jennifer J. Hawkins are Trust & Estate Specialty Board Certified Indiana Trust & Estate Lawyers and active members of the Indiana State Bar Association and National Academy of Elder Law Attorneys. Both lawyers are admitted to practice law in Indiana, and Jeff Hawkins is admitted to practice law in Illinois. Jeff is also a registered civil mediator, a Fellow of the American College of Trust and Estate Counsel and the Indiana Bar Foundation; a member of the Illinois State Bar Association and the Indiana Association of Mediators; and he was the 2014-15 President of the Indiana State Bar Association.
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