According to many sources, as many as half of all Americans over the age of 65 will require some form of long-term care during their lives. Unfortunately, the costs can be substantial—estimates put the cost of a private room in a nursing home in New Jersey at more than $300 each day. Because few people have long-term care insurance, and because Medicare and private health insurance don’t pay for nursing home or assisted living care, most people must turn to Medicaid. The availability of Medicaid, though, is based on income and assets, including that of the Medicaid applicant’s spouse.
Under federal law, though, a Medicaid applicant’s spouse (known as a “community spouse”) has some protection, in order to prevent impoverishment. There are two mechanisms designed to ensure that a community spouse does not become destitute: the community spouse resource allowance (CSRA), which we will discuss in this blog, and the monthly maintenance needs allowance (MMNA), which we will address in a subsequent article.
The Community Spouse Resource Allowance
Under federal law, a community spouse is allowed a certain amount of resources, either in cash or assets, without jeopardizing the other spouse’s eligibility for Medicaid benefits. Typically, a community spouse will apply for the CRSA after his or her partner goes into a nursing home. The calculation of the amount of the CRSA is based on the couple’s resources as of the date of admission.
Calculating the Community Spouse Resource Allowance
As a general rule, the CSRA is the lower of one-half of the couple’s resources or $126,240. There are, however, assets and resources that are exempt from inclusion, including the marital home (up to $878,000 if applying in the State of New Jersey), certain household goods and personal property, irrevocable funeral trusts and a motor vehicle. The CSRA is determined by adding up the value of all non-exempt assets and dividing by two. There are, however, minimum and maximum CSRAs. The minimum CSRA is $25,284 and the maximum is $126,240.
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