SmartLaw: Attorney and Lawyer Referral Service. Divorce, bankruptcy, criminal, accident, business
SmartLaw.org
Home
 
The Los Angeles County Bar Association Lawyer Referral and Information Service, the largest and oldest such service in the United States, has hundreds of pre-screened, qualified and insured lawyers in the Los Angeles area who can help you with your legal issues. Contact us now and our courteous, professionally trained staff will help you connect you with the right lawyer. The LRIS is a nonprofit public service of LACBA.

Message #680 Nursing homes: Paying for spouse's care

mp3 #680 Paying For Your Spouse's Nursing Home (mp3 file)


The cost of nursing home care in a convalescent hospital in California can be $3,000 a month or more. Long-term nursing home care is not covered by many private insurance policies, and is not covered in full by the federal Medicare program. Not many people can afford to pay $3,000 a month for very long, and even fairly well-off families can have their savings wiped out and become poor, while paying for nursing home care for a family member.

California has a medical benefits program called Medi-Cal, which pays for part or all of the cost of nursing home care, for people who are considered "medically needy." to be eligible for Medi-Cal, the person in a nursing home may have no more than $2,000 in certain types of assets, and an income which is less than the costs of nursing home care and related expenses.

If you are married, and your spouse requires long-term care in a nursing home, you may be afraid that you will be forced into desperate financial circumstances to pay for your spouse's care, both before and after your spouse is eligible for Medi-Cal payments. You may have friends or acquaintances who have become poor in these circumstances.

California law now protects married couples from losing all their assets, before one spouse is eligible for Medi-Cal benefits for nursing home care. However, many couples do not know about changes in the law and they may act unwisely as a result of advice they receive from people who are well-meaning but poorly informed.

Some couples are told that they have no choice but to sell their house and their car and spend their money until they are down to the $2,000 Medi-Cal limit for the spouse in the nursing home, but this is not required in California. A couple may keep their house, their car, and various other assets, while one spouse is eligible for Medi-Cal in a nursing home.

Some couples are told that they should get a divorce, so the spouse who is not in a nursing home can save half of their resources, and avoid living on a welfare level at home. This is not now necessary in California, because the spouse outside a nursing home is entitled to keep up to $90,540 of the couple's combined community and separate property, and all of his/her own monthly income. The spouse outside the nursing home may also be able to keep $2,267 of the monthly income of the spouse in the nursing home.

Some couples are told that they should give all their assets to their children, in order to qualify for Medi-Cal for themselves. This is not a wise move, however, because it not only deprives the couple of their own property, but it also can make the couple ineligible to use Medi-Cal for nursing home care if the transfer of assets was made within 30 months before applying for Medi-Cal.

Because of new laws effective January, 1990, married couples in California do not have to become poverty stricken, or get a divorce to avoid poverty, when one spouse requires long-term nursing home care.

California laws now permit the spouse in a nursing home to keep $2,000 of the couple's combined community and separate property. The other spouse in the community may keep $90,540 of the couple's combined community and separate property. The spouse in a nursing home may transfer all of that spouse's interest in their family residence to the other spouse. This transfer may take place even after one spouse enters a nursing home. The advantage of these laws is that the house of the spouse who lives in the community cannot be counted as part of the assets of the spouse who lives in a nursing home, when determining eligibility for Medi-Cal benefits.

For example, a couple with a $100,000 nest egg can transfer $90,540 of their property into the name of the community spouse. A husband in a nursing home would have to spend the remaining $9,460 down to $2,000 before becoming eligible for Medi-Cal, but his wife in the community would still be able to keep her own $90,540 share. This property transfer must involve an actual change of title. The assets transferred to the community spouse must be in that spouse's name only, and must not include the name of the nursing home spouse on the title of ownership. This same couple, in addition, may own a family home. The spouse in a nursing facility may formally transfer all of his or her interest in the family house to the other spouse, merely by signing a notarized grant deed. Medi-Cal will not consider any of the value of the home, in determining Medi-Cal eligibility for the spouse in a nursing facility. Also, the spouse receiving full title to the home does not have to pay anything to the other spouse for receiving full title to the family home. The family home does not have to be formally deeded by the spouse in the nursing home to the spouse outside, however, because as long as one spouse continues to live in the family home, it is not counted as a resource for Medi-Cal eligibility. However, if the spouse outside wants to sell the house, or wants to will the house to his or her heirs, it is easier if that spouse has full title to the home. The proceeds of the sale of the family house will then be the property of the community spouse, and will not be considered for payment of care for the nursing home spouse.

If the spouse in a nursing home is not mentally competent to transfer his or her interest in the family home to the other spouse, this can still be accomplished through the court procedures described in Probate Code Sections 3101 and 3144(a).

So far, this message has been discussing the division of already-owned assets, such as cash, stocks, and the family home. But what about the monthly income of married couples, when one spouse is receiving Medi-Cal in a nursing home? How much of the monthly income goes to pay for nursing home care, and how much of the monthly income can be used by the community spouse who is outside the nursing home?

The community spouse may keep all income which is in his or her name only. Also, the nursing home spouse may give some of his or her income to the community spouse and to dependent family members who live with the community spouse. The nursing home spouse keeps $35 per month for personal needs, but may give other income to the community spouse, to make sure that the community spouse has a total monthly income of $2,267 or to a dependent family member living with the community spouse up to a maximum of $1,230 per family member. If the nursing home spouse still has any income after that, then the remaining income is used to pay for nursing home care. The $2,267 amount is called the Community Spouse Income Allowance, and this amount will change each year, based on the consumer price index.

For example, suppose a husband in a nursing home has an income of $1,500 a month, and his wife in the community has an income of $500 a month, for a total family income of $2,500 a month. The wife who is outside a nursing home is entitled to receive $1,767 from her husband, to add to her $500 income, to bring her total monthly income up to $2,267, which is the amount of the community spouse income allowance. The husband would then use the remaining $233 for his nursing home care and personal expenses.

Now reversing the situation, suppose the wife outside a nursing home is the one who has an income of $2000 a month, and the husband in the nursing home is the one who has an income of $500 a month. The total family income is again $2,500 a month. Here, the husband in a nursing home would give his wife $267 of his income, and use the remaining $233 for his personal needs and nursing home care. His wife outside is not expected to pay anything of her $2000 monthly income, for her husband's nursing home care. She may keep all of her $2000 monthly income for her own use, plus $267 from her husband, for a total community spouse income allowance of $2,267 per month.

The basic idea is that a spouse outside a nursing home is entitled to a minimum of $2,267 a month from the couple's total monthly income.

Now consider still another example. Suppose a community spouse has a monthly income of $3000 in his or her own name only, while the nursing home spouse has a monthly income of $1,000. The community spouse may keep all of his or her $3000 monthly income, and is not required to pay anything for the nursing home spouse's care. The nursing home spouse would use all of his or her $1,000 monthly income to pay for nursing home care. The community spouse is already receiving more than the $2,267 community spouse income allowance, and so is not entitled to receive any additional income from the nursing home spouse. However, if there are any dependent family members, they may be entitled to some of the income from the nursing home spouse.

Medi-Cal rules for nursing home care are quite complex, and the rules often change. To obtain up-to-date information about your personal situation, talk to the staff of the Medi-Cal office in your community.

The current Medi-Cal laws prevent couples from having to become poor in order to qualify for Medi-Cal, and prevent couples from having to get a divorce in order for the community spouse to avoid poverty for himself or herself, when the other spouse requires nursing home care. The laws now permit the community spouse to keep up to $90,540 of the couple's combined community and separate property, and $2,267 of the couple's monthly income, and even full title to the family home, while the other spouse receives nursing home care through Medi-Cal.

This message is based in part on an article in California Lawyer Magazine.

Back to Top

() -

 
 

Find a lawyer outside of California.