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Home » Elder Law » An Overview of 2021 Medicaid Spousal Impoverishment Standards

An Overview of 2021 Medicaid Spousal Impoverishment Standards

December 10, 2020 by Pamela Potter

Medicaid spouse allowancesPeople that will qualify for Medicare should understand the Medicaid parameters because of an inconvenient truth.

More than one third of elders will reside in nursing homes eventually, and Medicare does not pay for the custodial care that they provide. These facilities are very expensive, and married couples can be inundated with two different sets of nursing home bills.

Medicare does cover nursing home care, and this is why it is relevant to seniors who will be enrolled in the Medicare program.

Medicaid Eligibility Criteria

Since Medicaid is a need-based program, you cannot qualify if you have more than $2000 in countable assets in your own name. Your home is not a countable asset, but there is an equity limit of $595,000 in 2020.

This figure and the spousal allowances that we are going to look at are adjusted annually to account for the cost of living. In 2021, the Medicaid home equity limit in North Carolina and Kentucky will be $603,000.

One motor vehicle is not counted, and wedding and engagement rings are exempt. If you have heirloom jewelry, it would not be considered, and Medicaid is not concerned about your personal belongings and household items.

Up to $1500 set aside for final expenses is permitted, and you can have this much whole life insurance in most places.  (North Carolina allows up to $10,000 in face value.) Unlimited term life is allowed because this insurance has no cash value.

Allowances for the Healthy Spouse

When a married person is applying for Medicaid to pay for long-term care and the spouse can still live at home, there is no equity limit at all. The healthy spouse is also entitled to two important allowances.

One of them is the Community Spouse Resource Allowance (CSRA), which is equal to half of the shared countable assets in Kentucky and North Carolina. There is a limit on the high-end, and there is also a minimum CSRA.

During the current calendar year, the maximum CSRA is $128,640, and the minimum is $25,728. In 2021, the minimum will be $26,076, and the maximum Community Spouse Resource Allowance will go up to $130,380.

The healthy or community spouse can also be entitled to a Monthly Maintenance Needs Allowance. This gives the independent spouse the ability to continue to keep income that is brought in by the spouse who is residing in a nursing home.

In 2020, the maximum allowance is $3216, and the minimum is $2113.75 a month. When the new year rolls around, the minimum allowance will be $2155, and the maximum will go up to $3259.50.

Spending Down

You can fund an irrevocable Medicaid trust to remove countable assets from your name to qualify for Medicaid to pay for long-term care. However, you have to act well in advance because the funding must be completed five years before you apply.

If you break this rule, you have to wait out a period of ineligibility. The length of the penalty would depend on the amount that you conveyed into the trust.

For example, if you funded the trust with enough to pay for a year in a nursing home care, you would be ineligible for a year.

Access Our Free Worksheet

We have some great resources that you can access free of charge on this website, and one of them is our estate planning worksheet. If you take the time to go through it, you will come away with a more thorough understanding of this important process.

You can get your copy if you head over to our worksheet page and follow the simple instructions.

Need Help Now?

We are here to help if you are ready to work with an attorney to develop a plan for aging that will preserve your legacy.

You can set up an appointment in Charlotte, North Carolina or Huntersville, North Carolina if you call us at 704-944-3245. The number for our Ashland, Kentucky office is 606-324-5516, and the number for our Florence, Kentucky office is 859-372-6655.  Or you can fill out our contact form if you would like to send us a message.

  • Author
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Pamela Potter
Pamela Potter
Owner and founder of the Ashland, Kentucky based Potter Law Firm, Ms. Potter concentrates her practice in the area of estate planning, estate administration, and elder law. Mrs. Potter’s goal is to help her clients plan secure financial futures for themselves and their families. To achieve that goal, her firm offers a wide range of estate planning services, including wills, trusts, and powers of attorney in addition to probate, estate administration, elder law, and Medicaid Planning services.
Pamela Potter
Latest posts by Pamela Potter (see all)
  • 2022 Estate Tax Exclusion Has Been Set - December 6, 2021
  • An Overview of 2022 Medicare Cost Increases - November 24, 2021
  • Elder Financial Abuse Is a Looming Threat - November 22, 2021

Filed Under: Elder Law Tagged With: Community Spouse Resource Allowance, Medicaid Planning, Monthly Maintenance Needs Allowance

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About Pamela Potter

Owner and founder of the Ashland, Kentucky based Potter Law Firm, Ms. Potter concentrates her practice in the area of estate planning, estate administration, and elder law. Mrs. Potter’s goal is to help her clients plan secure financial futures for themselves and their families. To achieve that goal, her firm offers a wide range of estate planning services, including wills, trusts, and powers of attorney in addition to probate, estate administration, elder law, and Medicaid Planning services.

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Overall The Potter Firm was very professional. They took what could of been a very complicated process and were able to break it down so it was a lot easier to understand. We are confident we now have made the right decisions in our estate planning. Good firm to work with.

DKS & KMS Client Review August 28, 2020

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John Potter has been a real pleasure to work with. He is very knowledgeable and explains things in a very simplistic manner so the average person can understand how/why the laws are written. He is very attentive and asks questions in such a way that not only helps him understand your goals, but also helps you think about what type of goals and expectations you should be considering. Exemplary client service.

David J. Client Review August 28, 2020

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My husband and I selected Ms. Potter to assist with our small business. She responsive and attentive every time I have a question or need assistance, and is extremely knowledgeable and able to answer any legal question I have had. I know I can count on Ms. Potter for all of my business legal needs and I would highly recommend her to anyone needing legal assistance with such.

Jillian Client Review August 28, 2020

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1620 Carter Avenue
Ashland, KY 41101-7631
Phone: (606) 324-5516
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15720 Brixham Hill Avenue
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Charlotte, NC 28277
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