In a 60 Minutes episode, the show focused on individuals with frontotemporal dementia (FTD) and the negative results of such. It was difficult for me to watch when they had an example of a 50 year old husband had FTD. His condition deteriorated to a point where he had to be placed into an assisted living facility at age 50.
It is likely that the husband will end up needing a skilled nursing facility at a cost of $17,000 – $20,000 per month. It could wipe out their savings in a very short amount of time. Despite the husband being only 50 years old, he could qualify for disability and also qualify for Medicaid (Title 19). So instead of paying $17,000 per month for his care, it could be covered 100 percent by Medicaid.
It is important that you make sure you’re getting the best possible information and advice for both you and your spouse. I recently met with a client who indicated that he had spent all of his retirement money keeping his wife home by paying for her care. I only wish that he had contacted me much earlier. Almost all of their money could have been saved and Medicaid (Title 19) would have paid for her care. People who read this column have heard me say so many times: Be careful who you get your advice from.
If your spouse permanently enters a nursing home and applies for Medicaid assistance, the state Department of Social Services (DSS) will require a division of assets – a share for the community spouse (healthy spouse) and a share for the institutionalized spouse (ill spouse). DSS will count all of your assets and may not necessarily divide the assets in half.
Division of assets is the name commonly used for the Spousal Impoverishment provisions of the Medicare Catastrophic Act of 1988. It applies only to couples. The intent of the law was to change the eligibility requirements for Medicaid where one spouse needs nursing home care while the other spouse remains in the community, i.e. at home. The law, in effect, recognizes that it makes little sense to impoverish both spouses when only one needs to qualify for Medicaid assistance for nursing home care.
As a result of this recognition, division of assets was born. Basically, in a division of assets, the couple gathers all their countable assets together in a review. Exempt assets are not counted.
The countable assets are then divided in two, with the at-home or “community spouse” allowed to keep one half of all countable assets to a maximum of approximately $154,140. The other half of the countable assets must be “spent down” until less than $1,600 remains, in Connecticut. The amount of the countable assets which the at-home spouse gets to keep is called the Community Spouse Protected Allowance (CSPA). It is important to note that, with proper planning, there are legal ways for couples to protect far more than $154,140, in many cases, everything.
Connecticut also establishes a monthly income floor for the at-home spouse. This is called the Minimum Monthly Needs Allowance. This permits the community spouse to keep a minimum monthly income ranging from about $3,853.50 As with protecting more assets, there are ways to protect more income.
If the community spouse does not have at least $3,853.50 in income, then he or she is allowed to take the income of the nursing home spouse in an amount large enough to reach the Minimum Monthly Maintenance Needs Allowance (i.e. up to at least $3,853.50). The nursing home spouse’s remaining income goes to the nursing home. This avoids the necessity, hopefully, for the at-home spouse to dip into savings each month, which would result in gradual impoverishment.
