The Medicare Catastrophic Coverage Act of 1988 (MCCA) implemented Spousal Impoverishment Protection Legislation in 1989 to prevent married couples from being required to spend down income and other liquid assets (cash and property) before one of the partners could be declared eligible for Medicaid coverage for nursing facility care. The spouse residing at home is called the community spouse (which has nothing to do with community property). Before monthly income is used to pay nursing facility costs, a minimum monthly maintenance needs allowance (MMMNA) is deducted. To determine whether the spouse residing in a facility meets the state's resource standard for Medicaid, a protected resource amount (PRA) is subtracted from the couple's combined countable resources. In 2015, the PRA is the greatest of the: Spousal share, up to a maximum of $119,220 State spousal resource standard, which a state could set at any amount between $23,844 and $119,220 in 2013 Amount transferred to the community spouse for her or his support as directed by a court order Amount designated by a state officer to raise the community spouse's protected resources up to the minimum monthly maintenance needs standard The couple's home, household goods, automobile, and burial funds are not included in the couple's combined countable resources. The community spouse's income is not available to the spouse who resides in the facility, and the two individuals are not considered a couple for income eligibility purposes. The state uses the income eligibility standard for one person rather than two, and the standard income eligibility process for Medicaid is used. After the PRA is subtracted from the couple's combined countable resources, the remainder is considered available as resources to the spouse residing in the facility. If the amount of resources is below the state's resource standard, the individual is eligible for Medicaid. Once resource eligibility is determined, any resources belonging to the community spouse are no longer considered available to the spouse in the facility.
Mr. and Mrs. Smith have been married for 50 years. They have lived in the same house for 40 years and take pride in the fact that it has been paid in full and valued at around $110,000. The Smiths have no outstanding debt, and just $25,000 in a savings account plus a pension plan they each receive as a result of retirement from their respective positions. The amount of Mr. Smith's monthly pension is $1,500, and the amount he receives from social security each month is $1,200. Mrs. Smith's monthly pension is $1,600, and the amount she receives from social security each month is $1,300. Mrs. Smith was diagnosed with Alzheimer's disease, and she needs care 24 hours per day. At first, Mr. Smith thought he could take care of his wife, but he quickly realized this was impossible. After careful deliberation, he decided to admit his wife to a sub-acute nursing facility that could provide her with care. Mr. Smith is very concerned about the cost of this care. He does not want to sell the house, but he also knows his wife needs this level of care. He conferred with an attorney and was told that the state's spousal resource standard is $24,000. Mr. Smith would not be required to sell his home, and he would not be required to contribute his monthly pension or social security for his wife's care. Mr. Smith would be required to spend down $1,000 of their $25,000 savings account, and contribute his wife's monthly pension and social security totaling $2,900 toward her care. Mr. Smith received a bill in the amount of $7,500 for his wife's first month of care at the sub-acute care nursing facility. As a result of the meeting of Mr. Smith with the attorney, which amount will Mr. Smith be required to pay to the facility for the first month of care?
a. $ 56,000
Mr. Smith will be required to pay $3,900 to the facility for the first month of care.
The simple reason for this is as the attorney mentioned that the state's spousal resource standard is $24,000 and he has to pay $1000 from the $25,000 savings account. This is nothing but their protected resource amount (PRA) which is subtracted from the couple's combined countable resources (saving account and not other assets like house)
$1000 is the minimum monthly maintenance needs allowance (MMMNA) and $2,900 is the wife's monthly pension and social security total which the state uses to meat the income eligibility standard for one person rather than two. Adding these two amount, Mr. Smith will have to pay a total of $3,900 for the month.
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