Medi-Cal Planning for Married Couples

The Medicare Catastrophic Act of 1988 provides Spousal Impoverishment provisions. These provisions provide opportunities for married couples to plan and qualify for Medi-Cal. The spouse is entitled to keep a minimum of $123,600 of non-exempt assets (2018 guidelines). This is commonly referred to as the community spouse resource allowance or CSRA. CSRA combined with a $2,000 property reserve allows the spouse to possess $125,600 of non-exempt assets.

After Medi-Cal qualification and the disabled spouse is moved into a nursing home, his/her name must be removed from all CSRA assets. It is usually advisable to also have his/her name removed from exempt assets, such as the primary residence. The estate planning documents of the disabled spouse must grant the other spouse authority to make gifts or through a court order.

In addition, each state is required by federal law to establish a monthly income floor for the spouse. This is known as the Minimum Monthly Maintenance Needs Allowance (MMMNA).  California uses the maximum MMMNA, allowing the spouse to have a minimum monthly income of $3,090.

A court order may aid married couples

If the spouse does not have at least $3,090 in income, he/she is allowed to enlarge the CSRA to keep assets over $123,600. This is to generate interest income to compensate. If the increased CSRA is still not enough, the spouse can also take the nursing home spouse’s remaining income to reach the $3,090. This increase in the CSRA can be done through a court order (usually combined with a request to remove the nursing home spouse from all assets).

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