Definitions
To better understand the Medicaid Community Spouse Resource Allowance (CSRA), it is important to understand the terminology associated with it.
- Community Spouse – the spouse who is not applying for long-term care Medicaid, also called the non-applicant spouse, healthy spouse, or well spouse.
- Institutionalized Spouse – the applicant spouse, sometimes called the nursing home spouse. The term, “institutionalized” is misleading as the CSRA isn’t only for married couples with one spouse seeking nursing home care. It is also for married couples with one spouse applying for long-term care services in their home or community via a Medicaid waiver.
- Resources – commonly called assets. For Medicaid purposes, there are both countable (non-exempt) and non-countable (exempt) resources.
What is the Community Spouse Resource Allowance?
When only one spouse of a married couple applies for Medicaid long-term care, federal spousal impoverishment rules prevent the non-applicant spouse from having too little income and resources on which to live. Since Medicaid is for persons with very limited resources and income, these rules help to avoid the situation where one spouse enters a nursing home and the other spouse lives in poverty.
To be Medicaid-eligible, there is an asset limit. When an applicant is married, the assets of both spouses are considered jointly owned. This means that regardless of in whose name an asset is in, it is calculated towards the asset eligibility of the applicant spouse. Generally speaking, in 2022, the applicant asset limit for an elderly individual is $2,000. However, Medicaid allows a greater portion of the couple’s assets to be protected for the non-applicant spouse. This is called a Community Spouse Resource Allowance (CSRA).
A similar rule exists for income. This is called the Minimum Monthly Maintenance Needs Allowance (MMMNA). The MMMNA allows applicant spouses to transfer a portion of their income to their non-applicant spouses. For the purposes of this article, the focus will be on the Community Spouse Resource Allowance and protecting joint assets for the non-applicant spouse.
Minimum and Maximum Resource Allowance Amounts
While the exact amount of assets that can be retained by the non-applicant spouse as the Community Spouse Resource Allowance varies based on the state, the federal government sets a minimum and maximum “resource standard”. In 2022, the minimum CSRA is $27,480 and the maximum CSRA is $137,400. It is within these federally set standards that states are permitted to set their own standards.
Not all states use both a minimum and maximum figure. Instead, some states use one standard figure, which is generally the maximum resource standard of $137,400, However, some states opt for a lower figure. For example, South Carolina uses a standard figure of $66,480 and Illinois uses a standard figure of $109,560.
To see state specific community spouse resource allowance amounts, click here.
Which Resources are Countable?
Not all of a couple’s assets / resources are counted when calculating the Community Spouse Resource Allowance. There are Countable (Non-Exempt) assets and Non-Countable (Exempt) assets.
Countable (Non-Exempt) Assets
Countable assets are generally considered liquid assets, which are assets that can easily be converted to cash and used to pay for long-term care. Examples include cash, certificates of deposit, stocks, bonds, and vacation properties.
Non-Countable (Exempt) Assets
Several assets are considered exempt and are not factored in when adding up a couple’s assets to calculate the CSRA. These include the couple’s primary home, given the non-applicant spouse lives in it, household furniture and appliances, clothing, an automobile, irrevocable (it cannot be changed or cancelled) funeral and burial trusts, and life insurance policies with a total face value under a certain amount (generally $1,500).
How to Calculate the Community Spouse Resource Allowance?
All countable assets of a couple, regardless of which spouse legally owns an asset, are determined on a “snapshot date”. The snapshot date is generally the applicant’s first day of institutionalization (with a minimum of a 30-day stay) or the date they qualify for a Medicaid waiver. The total value of the couple’s non-exempt assets are added together on this date and the CSRA is determined. The way this is calculated is based on if a state is a 50% or a 100% state. In Medicaid speak, a 50% state may be called a one-half deduction state, and a 100% state, a straight deduction state.
50% States
In 50% states, a community spouse is able to keep 50% of the couple’s countable assets up to a cap, which is the state’s maximum resource standard. In these states, 50% of the couple’s assets are considered owned by the applicant, and the other 50%, owned by the non-applicant. If the community spouse’s half of the assets are under the maximum resource standard, this is often the amount of their CSRA. The maximum resource standard in most states is $137,400. However, these states also use a minimum resource standard to protect couples who have very limited resources. This figure is usually $27,480 and is the minimum amount of assets to which a non-applicant is entitled. If the non-applicant’s 50% of the assets is under $27,480, they can retain 100% of the assets, up to this figure.
Examples:
A couple has $150,000 in countable assets. The CSRA is $75,000 ($150,000 ÷ 2 = $75,000) because it is higher than the minimum resource standard of $27,480 and is under the maximum resource standard of $137,400. The applicant’s assets are also $75,000. Since the applicant spouse is limited to $2,000 in assets, $73,000 is assets must be “spent down” for the applicant to become asset eligible.
A couple has $25,000 in countable assets. The CSRA is $25,000 because it falls under the minimum resource standard of $27,480.
100% States
In 100% states, one standard figure is used in calculating the CSRA. In most states, this figure is $137,400. In these states, a non-applicant spouse can retain 100% of the couple’s countable assets up to the cap of $137,400.
Examples:
A couple has $140,000 in countable assets. The CSRA is $137,400. The applicant’s asset limit is $2,000. This means that $600 must be “spent down” for the applicant spouse to become asset-eligible. ($140,000 – $137,400 = $2,600 – $2,000 = $600).
A couple has $72,000 in countable assets. The CSRA is $72,000.
| Medicaid 50% and 100% States for CSRA – Updated Dec. 2021 | |||||||||
| 50% States | 100% States | ||||||||
| Alabama Arizona Arkansas Connecticut Delaware Idaho Indiana Iowa Kansas Kentucky Maryland Massachusetts Michigan Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Dakota Tennessee Texas Utah Virginia Washington Washington, DC West Virginia Wisconsin |
Alaska California Colorado Florida Georgia Hawaii Illinois Louisiana Maine Minnesota Mississippi South Carolina Vermont Wyoming |
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Asset Spend Down
If the applicant’s portion of the couple’s assets is over the state’s asset limit and/or the non-applicant’s portion is over the maximum CSRA, the couple must “spend down” their countable assets to meet the asset limit. This is often done by converting countable assets into non-countable assets. Examples include making home improvements and modifications (updating heating and plumbing systems, adding a first floor bedroom installing a chair lift, etc.), paying off debt (mortgage, credit cards, medical bills), and prepaying funeral and burial expenses. One can also turn countable assets in an income stream via a Medicaid compliant annuity.
Seek the Advice of a Professional Medicaid Planner
Medicaid eligibility can be complicated, particularly if one is over the asset limit. When spending down assets, one needs to be cautious. Giving away assets or selling them under fair market value can violate Medicaid’s look back period and result in a penalty period of Medicaid ineligibility. If one is over the asset limit, it is highly advised one contact a professional Medicaid planner for assistance.