Hi, I’m Alex Thompson, Benefits Planner for Krause Financial Services. Today, I’m going to talk to you about the Community Spouse Resource Allowance and how it’s used in planning.
One of the biggest issues couples face when trying to qualify for Medicaid is the financial well-being of the community spouse. That’s why the Medicaid program has adopted certain measures to avoid spousal impoverishment.
The goal is for the spouse at home to maintain their current lifestyle within the community. This is done through asset and income regulations that ensure the community spouse is not left destitute once their loved one enters a nursing home.
The institutionalized spouse is entitled to retain $2,000 in countable assets, in most states, known as the Individual Resource Allowance. Beyond that, the community spouse is entitled to retain a separate amount known as the Community Spouse Resource Allowance, or CSRA.
Though the community spouse must initially spend down to be within their CSRA, once eligibility is achieved, Medicaid will no longer consider any of the community spouse’s assets available to the institutionalized spouse and therefore will no longer need to be within the CSRA limits.
Most states apply a minimum and maximum CSRA. This means the community spouse is not automatically entitled to retain a standard amount. Rather, the amount they may keep is based on the total countable assets as of the snapshot date. This date is the first date after which the Medicaid applicant spent 30 consecutive days in a facility. The minimum and maximum CSRAs vary from state to state.
In order to determine the allowance in minimum and maximum states, take the snapshot date of your client, determine the total countable assets on that date, and divide that amount in half.
Some states apply a standard CSRA for all cases involving a married couple. As such, the couple must spend down their excess countable assets to this limit in order to qualify the institutionalized spouse for Medicaid. The amount will vary from state to state but is usually the maximum CSRA.
In order to determine the allowance in a standard CSRA state, your client will need to make sure they are at or below the standard amount.
Let’s move into some examples.
To start, we’ll need to know the current CSRA. In 2019, in most states, the maximum Community Spouse Resource Allowance is $126,420, and the minimum is $25,284. This rate will vary in some states so make sure to pay attention to the state your client lives in.
Now, let’s take Joan and Andrew. They live in Kansas, which is a minimum/maximum state, and will follow the 2019 figures previously mentioned. Andrew enters a nursing facility on April 1st. Together they have $200,000 in countable assets on this date. Thirty days later, on May 1st, they decide to apply for Medicaid.
On the snapshot date, they had $200,000, so in order to figure out what Joan will be allowed to keep, we divide that amount in half to get $100,000. Now, because that amount is between $25,284 and $126,420, the minimum and maximum amounts, Joan is allowed to keep the full $100,000.
But let’s say they had $300,000 dollars in assets. If we cut that in half, we have $150,000, and that is more than the maximum CSRA. In this case, they would be entitled to keep the maximum amount of $126,420 and would have to spend down the rest.
On the reverse side, if they only had $40,000 in assets, after dividing that in half, they would have $20,000. Because they are in a min/max state, they would actually be allowed to keep the minimum of $25,284.
But what if Joan and Andrew lived in Colorado, which is a standard Community Spouse Resource Allowance state? If they have $300,000 in assets, they will have to spend down their assets until they reach the standard of $126,420. But if Joan and Andrew only have $75,000 in assets, they will get to keep the total amount of $75,000 because it is under the standard amount.
If you’d like to learn more about your client’s options when working towards Medicaid eligibility, contact our office at 855-552-5893 to speak with a Benefits Planner.
I’m Alex Thompson, and thanks for watching.