California has applied The Spousal Impoverishment Protection Act since 1990, to protect an
at- home spouse from impoverishment due to the high costs of skilled nursing care (which can range from $8,000 - $12,000 per month).
The standard Community Spousal Resource Allowance is now $123,600 in countable assets (IRAs and retirement accounts don’t count, nor does the home!). It is often the case that this CSRA can be increased by court orders to cover much more than the standard $123,600 amount.
Similarly, the income rules under The Impoverishment Act are subject to modification by a court order. Thus, while the at-home spouse can always keep all of his or her monthly income (no matter how much it is), a “low income” at-home spouse can keep portions of the ill spouse’s income up to a combined limit of $3,090 per month. This “income allowance” is very often increased above $3,090 per month by court orders to protect the at-home spouse.
These Spousal Impoverishment protections has always applied to skilled nursing facilities, but not to In-Home Support Services (where care is provided to help keep the spouse in the home).
Federal law has expanded the meaning of “institutionalized spouse” to include people on Medi-Cal who are receiving Home and Community Based Services. The goal was to apply the more liberal spousal protections to Home and Community Based Services to help keep the sick spouse out of skilled nursing in the first place.
In 2017 these expanded spousal protections were implemented by California.
The Department of Health Care Services (DHCS) issued all County Welfare Directors Letter 17-25, on July 19, 2017, which defined an “institutionalized spouse” to allow for “a broader and more immediate application of the spousal impoverishment provisions for those receiving Home and Community-Based Services (HCBS)”.
The Spousal Impoverishment Protection Act will now allow the at-home community spouse to retain more income and resources when seeking Medi-Cal In-Home Support Services (IHSS) for an ill spouse, whose condition would otherwise require institutionalization in a skilled nursing facility. Now the legal authority behind an expanded community spousal resource allowance (CSRA) or an increased Minimum Monthly Maintenance Needs Allowance (MMMNA) via a court order of support are also applicable.
These are brand new provisions and many eligibility workers are unaware of the extension of spousal protections to HCBS In-Home Support Services. It will be critical to seek legal advice before seeking IHSS care for the ill spouse. Remember, the focus is on spouses who would otherwise require 24-7 custodial care in a skilled nursing facility. These Spousal Impoverishment protections are available for the same seriously ill at-home spouses.
So, let’s look at some examples of how this might work:
1. A 45 year old husband with ALS, wheelchair and bed bound, and who can’t speak, needs total care. His 49 year old wife works full time, is exhausted and is looking at skilled nursing care because she has been denied IHSS.
Assets: $17,000 in accounts, a house which is under water (FMV $280,000/$310,000 mortgage); and her income is $5,800/month in wages, his is $310 from disability. Game plan: Apply for HCBS Services (IHSS) under Spousal Impoverishment rules – ACWD 17-25.
Result: There may be up to 40+ hours/week of in-home care, with no share of cost: the “name on the check rule” which means the wife’s income is not available, and the husband’s income is within his expanded personal allowance. She might be able to keep him home.
2. A 60 year old wife with a Parkinson’s afflicted husband, who is bed bound and incontinent. The wife is retired and struggles to keep her husband in the home. She applies for HCBS (IHSS).
Assets: Include a home worth $300,000, plus $400,000 in IRAs and qualified accounts, and $120,000 in bank accounts. Their combined income is under $3,090 per month.
Result: Under the Spousal Impoverishment rules, the house and qualified accounts (IRAs) will be exempt or made unavailable, and the $120,000 in the bank accounts is less than the standard CSRA of $123,600. Thus, per ACWDL 17-25, they may qualify for In-Home Support Services. There would be no share of cost, since their combined income is less than the standard MMMNA allowance of $3,090 per month.
3. A 72 year old wife cares for a 74 year old husband suffering from the consequences of a stroke, and who is bed bound and incontinent. Both are retired.
Assets: A home worth $400,000, with a mortgage of $190,000, $100,000 in IRAs or qualified accounts, and $260,000 in bank accounts. Their combined income from RMDs and Social Security is less than $2,500 per month. She applies for HCBS (IHSS).
Result: The house and IRAs are exempt or unavailable. The Spousal Impoverishment Act permits a Medi-Cal application even when, as here, the “countable” assets (the $260,000 in bank accounts) exceed the standard CSRA of $123,600. In this case the application for IHSS would be denied (due to excess resources) and then appealed to an Administrative Law Judge who could be required to issue an order allowing In-Home Support Services and increasing the CSRA to $260,000, retroactive to the date of application!
4. A 68 year old wife of a 71 year old husband who can’t walk and is incontinent due to broken bones suffered in a fall. The wife wants to keep him at home. She applies for HCBS (IHSS).
Assets: Include a home worth $450,000, with a $275,000 mortgage, and $400,000 in countable bank accounts. Their combined income is $5,900 per month.
Result: Under the Spousal Impoverishment rules, I can present a monthly budget for the at-home spouse to a Superior Court and request an “Order of Support” in the amount of their $5,900 monthly income. If granted, the Order of Support will also set up an increased CSRA of $400,000 (as necessary to “fund” the Order of Support), all retroactive to the date of application for HCBS and Medi-Cal In-Home Support Services. There would be zero share of cost, and all assets will be kept for the well, at-home spouse! The sick spouse could qualify for up to 40 hours or more in-home care!
Don’t forget, these protections are not intended to help an at-home spouse whose spouse simply requires some form of community based care like a residential care facility for the elderly. Rather, the ill spouse must satisfy the same type of Adult Daily Living impairments as a spouse who needs 24-7 custodial care in a skilled nursing facility. Even so, these are major changes in the law and may help countless California at-home spouses.
The best way to understand how this new process will work is to work through the analysis of the California Advocates for Nursing Home Reform (CANHR), as set forth in their December 22, 2017 Fact Sheet:
“What are Home and Community Based Services?
Home and Community Based Services (HCBS), sometimes called “Medi-Cal Waivers,” are programs that offer an alternative to nursing homes. HCBS programs offer a package of services and supports to Medi-Cal beneficiaries who would otherwise require care in a nursing home, but who prefer to remain at home. Some of the benefits offered through HCBS programs include: caregiving (“personal care services”), assistance with chores and meal preparation, protective supervision, in-home nursing care, case management, and home modifications. Availability of HCBS programs varies from county to county, and the services offered through each program vary as well. HCBS programs in California include:
● Community First Choice Option (CFCO) - part of the IHSS program
● The Multipurpose Senior Services Program (MSSP)
● The Home and Community Based Alternatives Waiver (HCBA)
● The Assisted Living Waiver (ALW)
● Program for All Inclusive Care for the Elderly (PACE)
● California Community Transitions Program (CCT)
● Community Based Adult Services (CBAS)
● Home and Community Based Services for Persons with Developmental Disabilities
● Pediatric Palliative Care
● Self-Directed Services for Persons with Developmental Disabilities
For more information about individual programs visit http://www.dhcs.ca.gov/services/medical/Pages/Medi-CalWaiversList.aspx
How do I apply for Medi-Cal to pay for HCBS?
To apply for Medi-Cal to pay for HCBS, and to ensure that the spousal impoverishment protections are properly applied to your case, you must first indicate on your Medi-Cal application that you are interested in HCBS. On the Single Streamlined Application, you would answer “yes” to the question on Page 7 that asks: “Does this person need help with long term care or home and community based services?” You can downlaod the Single Streamlined Application here: http://www.dhcs.ca.gov/service...
Second, you must establish that you meet the clinical eligibility requirements for HCBS, meaning you must demonstrate that you require nursing facility level of care. To do this, you have two options:
- Have your doctor complete a Doctor’s Verification Form, which the Medi-Cal office should send as soon as you indicate that you are interested in HCBS. (You can also download the Doctor’s Verification Form online at www.dhcs.ca.gov/formsandpubs/forms/Forms/MC604MDV.pdf. ) After your doctor completes the form, she must send it directly to the county Medi-Cal office. OR
- Contact an HCBS program (i.e., one of the programs listed above) to begin the application process. The HCBS program will complete a needs assessment to determine whether you meet the clinical criteria for nursing home care. Once the needs assessment is complete, the HCBS program staff should communicate directly with your county Medi-Cal office to verify that you meet the clinical criteria for enrollment.
How do I contact an HCBS program to begin the application process?
Each HCBS program has a different intake and application process. The first step is to call the HCBS provider serving your county to initiate an intake. Phone numbers for some HCBS providers, by county can be found below.
1. Multipurpose Senior Services Program (MSSP): http://www.aging.ca.gov/ProgramsProviders/MSSP/Contacts/
2. California Community Transitions Project (CCT): http://www.dhcs.ca.gov/service...
3. Program for All Inclusive Care for the Elderly (PACE): http://www.canhr.org/factsheet... (scroll to bottom)
What if I Already have Medi-Cal?
If you are already enrolled in Medi-Cal, and you are not currently enrolled in one of the HCBS programs described above, you may contact an HCBS provider to begin the application process. Once you begin the application process for HCBS, and demonstrate you meet the clinical eligibility for HCBS (either by completing the HCBS needs assessment, or by having your doctor complete a verification form) the spousal impoverishment protections should be applied to your Medi-Cal case.
If you are already enrolled in Medi-Cal, and you are also already enrolled in one of the HCBS programs listed above, you are entitled to spousal impoverishment protections retroactive to January 1, 2014. If you believe you are entitled to retroactive spousal impoverishment, please call CANHR at (800) 474- 1116 and ask to speak with an advocate.
I am an In-Home Supportive Services (IHSS) recipient.
Is this considered an HCBS Program? A large percentage of people enrolled in IHSS are also enrolled in the Community First Choice Option (CFCO), which is an HCBS program. If you are an IHSS recipient, you can call your county Medi-Cal office to verify whether you are also enrolled in CFCO. If you are enrolled in CFCO, you are entitled to the spousal impoverishment protections.
What if the desired HCBS program has a waitlist?
Spousal impoverishment protections apply to HCBS applicants on waitlists, regardless if the wait is two months, two years or more.
Example: John and Mary live at home, and John has ALS. John needs a lot of care but wants to remain at home with Mary for as long as possible. John receives a pension of $2,500 per month. Mary receives a pension of $500 per month. They have savings of $50,000.
John applies to Medi-Cal and indicates he is interested in HCBS. He calls the Multipurpose Senior Services Program (MSSP) serving his county and begins the application for MSSP. The MSSP program staff complete a needs assessment demonstrating John meets the clinical eligibility criteria, and John’s Medi-Cal is approved under the spousal impoverishment protections. John has no Share of Cost, because John and Mary’s combined income is under $3,090.
Unfortunately , the MSSP program in John’s county has a waitlist. Even though John is on the waitlist for MSSP, he is still entitled to Medi-Cal with the spousal impoverishment protections. He can now use his Medi-Cal benefits to apply for IHSS and receive in-home caregiving with no Share of Cost.
Do you have any other tips?
The application process for a couple trying to use the spousal impoverishment protections for HCBS can be very difficult, and staff at many Medi-Cal offices and HCBS programs may not yet be familiar with the expanded spousal impoverishment protections. You may want to write explicitly on your Medi-Cal application, “Applicant is applying for Medi-Cal using the Home and Community Based Services and spousal impoverishment provisions outlined in ACWDL 17-25.”
A Way to Stay The first group of options is focused on staying in the RCFE, minimizing disruption to the resident. Perhaps the best route in this regard is SSI (Supplemental Security Income). If an RCFE resident is out of savings and makes less than $1,173 per month, they will qualify for SSI at the board and care rate. The facility will receive $1,039, which it must accept as payment in full for basic services, and the resident will receive $134, which they may use for personal needs.
For more on SSI in RCFEs see CANHR’s fact sheet at http://canhr.org/factsheets/rc... Another alternative for staying in place for military veterans who have run out of money is using the Veterans’ Aid and Attendance benefit. This gives qualifying veterans a modest monthly benefit to help pay for RCFE (or other types of) care. For more on the Aid and Attendance program, see CANHR’s fact sheet at http://canhr.org/factsheets/mi... attendance.htm If the RCFE participates in the Assisted Living Waiver (ALW) program, the resident who has run out of money and qualifies for Medi-Cal benefits should definitely apply. The ALW program is designed to keep RCFE residents out of more expensive nursing homes and pays the facility a range from approximately $50 to $200 per day. The problem is that not many RCFEs participate in the ALW program and there is currently a substantial waitlist to receive the benefit. For more on the ALW program, see CANHR’s fact sheet at http:// canhr.org/factsheets/rcfe_fs/html/fs_alw.htm If there is no benefit or program that will enable the resident to stay in their RCFE, a final option is to simply negotiate with the management for a lower rate. Some facilities may have occupancy shortages and prefer the resident stay at a lower rate than leave altogether. Moving On If the resident cannot stay in the facility despite the foregoing options, they should, of course, consider moving to a less expensive RCFE. This may be a viable alternative for a resident of a high end assisted living facility with a healthy income.
Residents with lower incomes who don’t qualify for SSI have few options. For some residents less dependent on care, they may be able to return to an independent living arrangement by cobbling their care together through family and friends, In-Home Supportive Services, adult day care, or another MediCal-funded Home and Community Based Service (HCBS) program that offers long term services to individuals living at home. For more on eligibility for these programs, see CANHR’s fact sheet at http://www . canhr.org/factsheets/medi-cal_fs/PDFs/FS_Spousal_ Impoverishment_HCBS.pdfFor residents who require a great deal of care and cannot go to an independent living arrangement, their only option may be a nursing home, paid for primarily through Medi-Cal. The big problem for these residents is that nursing homes are very reluctant to admit anyone when Medi-Cal is their primary payment source. Their chances of nursing home admission are much better if they can trigger Medicare coverage through a 3-day qualifying hospital stay - so the only option for an increasing number of RCFE residents is to try to get into a hospital. This is extremely unfortunate for residents and for public policy. A Growing and Vexing Problem The state and federal governments offer little in the way of benefits programs to RCFE residents who have run out of money. For generations, those governments have favored spending on institutional (nursing home) care. In 1999, the U.S. Supreme Court found the bias in favor of institutional spending violated disability discrimination law, which should have ushered a new era of community based alternatives. (Olmstead v. L.C.) While there have been efforts to expand home and community based programs since then, they have not kept pace with the increased demand as the population continues to age. Public spending in California continues to shamefully favor institutional care. Until major changes occur in our policies, RCFE residents who run out of money will continue to have limited options for future care and will often remain precariously unsure of what to do.
In California, 65 percent of nursing home residents rely on Medi-Cal to cover their nursing home expenses. Unfortunately, in some cases, the program can require you to pay all of your income toward care costs, and Medi-Cal has the right to take some of your assets to cover your costs after your death.
To reduce the financial burden, understand the basics of the program and do as much pre-planning as possible.
1. Asset Amounts Are Limited
If you use the Medi-Cal program to pay for nursing home expenses, you are only allowed to have a certain amount of assets. Unfortunately, this threshold has not changed for decades. As of 2017, the asset limit is $2,000 for an individual or $3,000 for a couple.
If you have assets that exceed that amount, they basically need to be liquidated before you can join the program. Unfortunately, you have to be careful about transferring or giving away assets. Before distributing payments to your nursing home, the program looks at the last 60 months of your personal finances to see what you have given away.
2. Some Assets Are Exempt
Luckily, certain assets are exempt. That means you can own them even if they exceed the above threshold. Exempt assets include your primary residence if your spouse lives there or you plan to return there. Possible exempt assets also include one vehicle, some personal belongings, a burial plot and certain life insurance policies.
If you are trying to get below the above asset threshold, you may want to buy some assets on the exempt list.
3. Income May Be Required
If you have an income, you may be required to do cost sharing. That simply means that you contribute some of your income to the cost of your care. Generally, you are only allowed to keep a small amount of money for monthly personal expenses.
4. Well Spouses May Be Allowed to Keep Some of Your Income
If you are married, your spouse may be allowed to keep some of your income. Under the laws related to Medi-Cal, the well spouse is entitled to a Minimum Monthly Maintenance Needs Allowance (MMMNA). As of 2017, the allowance is $3,023 per month. If the well spouse's income is less than that amount, he or she can keep part of your income.
For example, a well spouse has a pension of $1,000 and a Social Security payment of $1,100. The spouse going into the nursing home has a
monthly pension of $2,000 and a Social Security Income of $1,200. In this case, the well spouse's income is only $2,100. That is $923 under the MMMNA. The well spouse is entitled to keep that much of the other spouse's income while the rest goes to the Medi-Cal program.
If the situation were turned around, the well spouse would have an income of $3,200 and the spouse on Medi-Cal would have an income of $2,100. In this case, all of the latter spouse's income goes toward Medi-Cal because the well spouse's income meets the MMMNA on its own. The well spouse gets to keep all of his or her income.
Although there is a minimum allowance, there is no income limit imposed on the well spouse.
5. Medi-Cal May Take Your Home After Your Death
When someone who is on Medi-Cal dies, their home passes to their spouse. However, if they do not have a spouse or when the last spouse dies, the program may take the home to cover expenses. Luckily, you can avoid this by transferring ownership of the house.
Medi-Cal rules are complicated, and if you want to pass as many assets to your heirs as possible, you may need to do some pre-planning. To get started, contact the Rosā Law Offices today.
