If one of my parents goes into a nursing home and needs to apply for Medicaid, how can we ensure my other parent (community spouse) doesn’t lose their rent money/housing?


My parents recently sold their home and are using the money ($100,000) to live in an apartment. If one goes into a nursing home and wants to apply for Medicaid, how can the rent money be protected so that the community spouse doesn’t lose housing? State is Virginia. They are both 81 with no other assets and living only on social security.

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Medicaid planning when there’s a community spouse is complex, & really they should see an elder law attorney well versed in just how Medicaid runs for your state.

Most states have the community spouse OK to have 120k in exempt assets in addition to their home and a (1) car. AND for the CS none of her income is counted. Yeah CS income (not assets) isn’t included in their overall financial to determine his eligibility. Only dad need to be impoverished for Medicaids financial requirements. Although that sound great, if she is likely to outlive him and be healthy enough to live in her home / apt for years, that 100k will not be enough savings and it might be better put into a SPIA as income for her. And get it low enough monthly payout to be ok for actuarial tables AND so that she can be eligible for Medicaids CSRA or MMNA waiver.

Community Spouse Resource Allowance or Monthly Maintenance Needs Allowance. Kinda think of these as old school type of alimony for the community spouse. So say mom gets $800 SS and her SPIA pays her $200, so her income each month is just 1k. But dad gets $1500 a mo SS and under Medicaid rules is expected to have almost all of it - except for a $35-100 a mo personal needs allowance- go towards his required by Medicaid copay or SOC ( share of cost). NOW if mom can show that her $1k a mo isn’t enough for her community living costs then she applies for CSRA or MMNA. And the CSRA or MMNA $ is a waiver from dads SS $ to instead go to mom. Each state sets its $ amount. Like for TX it’s called MMNA & it’s about $2800, so in theory if dad got $2900 income each mo., and if mom could show need for all his $, then her MMNA would be $2740 a mo (TX has a $60 mo personal needs allowance) and all the NH would get would be is a $100 copay plus the set medicaid daily room&board payment. 

Couples planning is not DIY like for a widow or widower. They imo need an atty to shepherd them through the options. There’s all sorts of other things too... like most couples have each other as the beneficiary of their life insurance policy. Bad bad idea if Medicaid involved cause if mom should predecease dad, he inherits her insurance $ and is ineligible for Medicaid. So policy details need to be looked at and changed if need be. Just not simple. Attorney at NAELA or CELA level is worthwhile for couples. 
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Reply to igloo572

Thank you Marcia7321
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Reply to VM714va

There are provisions in every state to keep the "community spouse" from becoming impoverished by their spouse's residential Medicaid approval. We consulted an elder care attorney and there was no charge for a meeting just to explain the rules to us. Medicaid rules and spousal protection vary from state to state but they all have spousal protections.

In our case (state of NY) the ill spouse was able to move all the money that was held jointly or in her name only into the community spouse's name without triggering any "lookback" period. You can set up a trust to handle any income or assets that are higher than the allowed amount. We paid the lawyer to set up the trusts . We also paid the lawyer to redraw the wills and POA as the ill spouse could no longer be counted on to be POA or executor. But the initial meeting explaining the rules might be all you need- and you can find a lawyer to do that for free.
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Reply to Marcia7321

Thank you, bicycler!
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Reply to VM714va

VM714va, each state has its own Medicaid rules, but I'm pretty sure that none of them will impoverish or make the community spouse homeless. You or your parents should call their state's Medicaid office to have the rules and process explained and/or you may be able to find Virginia's these on it's website. After this initial investigation, if you have concerns or more questions, you may want to consult with an attorney specializing in Medicaid/elder law.

One idea that might be useful to your parents is putting their $100,000 into an immediate annuity. Depending on their ages and the option they choose, an immediate annuity could pay them from a few hundred per month to well more than $1,000 per month, but there could be better ideas than this, so don't have them do anything until you know more about Virginia's Medicaid rules.
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Reply to bicycler