The Indiana Medicaid rules for married couples needing nursing home care, or waiver services, will soon change. On March, 26, 2020, the Indiana Family & Social Services Administration announced that the retirement accounts of a Community Spouse must be included in determining an Institutionalized Spouse’s Medicaid eligibility.
This is a major change in Indiana law.
So, let’s put this into a practical example: Roy and Jane are married. Roy has a stroke, goes to the hospital and then to the nursing home. The first day he enters an institution and is there for more than 30 days is called a snapshot date under the Medicaid rules. This snapshot date determines how much of the couple’s combined resources that Jane gets to keep so she has enough funds to live on.
This happily married couple owns a home worth $60,000, and a 2006 minivan. They have $20,000 in savings, two small life insurance policies with a total cash surrender of $4,000 and Jane has $50,000 in an IRA. Jane gets to keep one-half of their combined resources subject to a minimum of $25,728 and a maximum of $128,640.
Prior to this change in the Indiana Medicaid rules, Jane’s IRA would not count as an asset, and Roy would have been immediately eligible for Medicaid. Their minivan, the house and Jane’s retirement account would have been considered exempt assets. Their assets and the cash from the life insurance are less than $25,728, Roy would be eligible for Medicaid in the nursing home.
The new rules now count Jane’s IRA, meaning that Roy & Jane now have countable resources of $74,000 and Jane gets to keep one-half, or $37,000, and must reduce their countable resources below this level to make Roy eligible for Medicaid for nursing home care or waiver services.
With the cost of nursing home care averaging $7,500 per month, or $90,000 annually, Jane is worried to death about her future. She immediately needs to consult an elder law attorney for advice.
When Indiana adopted the Affordable Care Act’s Medicaid expansion on June 1, 2014, Indiana stopped counting retirement accounts owned by the Community Spouse as a countable resource for an Institutionalized Spouse applying for Medicaid. This will soon change in Indiana. We do not know exactly when. We will update this article once we know the date this change will be implmented
Please visit our website at www.dhblaw.com and read out booklet “Planning for the Cost of Nursing Home Care” for more information.
Respectfully submitted, Keith P. Huffman March 2020
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