Section 303 of the Medicare Catastrophic Act contains provisions that significantly change the way in which income and resources of a couple are calculated when one spouse is institutionalized or likely to be institutionalized for continuous periods in a nursing facility, and who has a spouse residing in the community. The revisions are intended to prevent the spouse who remains in the community from becoming impoverished either before or after the institutionalized spouse becomes eligible for Medicaid.

Effective July 1, 1993, Delaware elected the option to apply the Spousal Impoverishment rules to persons who are likely to receive services under Section 1915(c) the Home and Community Based Waivers. All references to institutionalized spouses and continuous periods of institutionalization include spouses receiving Home and Community Based Waiver services in lieu of institutional services. Individuals receiving a combination of institutional and waiver services are subject to these rules.

Generally, the Bill counts income as Medicaid policy has always counted income (i.e., income owned by only one spouse is considered available solely to that spouse). One change is that income in both their names is divided evenly between the two spouses. The most drastic change occurs in the calculation of resources. Medicaid has always viewed the resources held solely by the non-institutionalized spouse as not available to the institutionalized spouse.

Under the Spousal Impoverishment provisions, all assets/resources held by either or both spouses are considered available equally to both spouses as of the beginning of the first continuous period of institutionalization (beginning on or after 9/30/89). The couple's house, car, and personal goods are excluded from countable resources.

Resource rules described in this section apply only to persons first institutionalized for continuous periods on or after September 30, 1989. Persons first institutionalized before that date are subject to prior Medicaid plan policies as long as they remain in an institution.

The spousal impoverishment regulations must be applied to any couple who is legally married unless the couple is separated and maintains two separate residences for at least 12 months prior to admission to a medical institution (hospital, nursing facility, etc.) AND the community spouse is uncooperative or his/her whereabouts are unknown.

These rules apply regardless of State laws relating to community property or to the division of marital property. For example, resources listed in a prenuptial agreement are not excluded.

The income eligibility and post-eligibility provisions in the instruction are effective September 30, 1989, and the resources provisions are effective October 1, 1989 for persons first institutionalized for continuous periods of institutionalization beginning on or after September 30, 1989.

20910 Definitions

An individual who is in a medical institution or nursing facility and is married to a spouse who is not in a medical institution or nursing facility.

9 DE Reg. 1187 (02/01/06)

9 DE Reg. 1565 (04/01/06)

10 DE Reg. 701 (10/01/06)

10 DE Reg. 1619 (04/01/07)

An individual who is married to an institutionalized spouse and does not receive HCBS.

9 DE Reg. 1187 (2/1/06)

9 DE Reg. 1565 (04/01/06)

A minor or dependent child, dependent parent, or dependent sibling (including half-brothers and half-sisters) of either spouse and who is living with the community spouse. A dependent is a family member who may be claimed as a dependent by either spouse for tax purposes under the Internal Revenue Code.

An allowance for the community spouse which, effective 7/1/92, equals 150% of Federal Poverty Level for two plus an excess shelter allowance. (Prior to 7/1/92 the allowance was 133% of the FPL for two plus excess shelter.)

The minimum maintenance needs allowance will change annually (every July) based on the FPL and the cap on the maintenance allowance will change annually (every January) based on the consumer price index. See Allowances Chart.

The amount by which the spouse's expenses for rent or mortgage payment, property taxes, and homeowner's insurance plus the Food Stamp standard utility allowance (SUA) exceeds 30% of the applicable percent of the FPL for two.

The amount of income needed to bring the monthly income of the community spouse up to the minimum maintenance needs allowance.

Income that is "otherwise available" to the community spouse. "Otherwise available income " includes income that would be used if eligibility was being determined for the community spouse, i.e. gross income.

Exception: Do not count as income to the community spouse the amount that the institutionalized spouse who is a veteran pays for the medical needs of the community spouse.

The amount of income needed to bring a family member's monthly income up to 1/3 of the applicable percent of the FPL for two. Each family member is entitled to a family allowance.

The state spousal share is the minimum amount of the couples' combined countable resources necessary to maintain the community spouse.

The community spouse resource allowance is the amount of resources equal to whichever is greater :

$25,000.00 (current state spousal share)

OR

1/2 of the value of the couple's combined countable resources as of the beginning of the first continuous period of institutionalization on or after 9/30/89, but no more than current maximum resource allowance determined by Federal law.

The minimum and maximum resource allowances increase on January 1 of each year by Federal law. Delaware Senate Bill 99 increased the minimum resource allowance from $14,148 to $25,000 for applications filed on or after 10/1/93.

If the share belonging to the spouse in the community is less than $25,000, the institutionalized spouse's resources are deemed available to the community spouse to bring the community spouse’s resources up to $25,000 for initial eligibility determinations. Any amount above the Maximum Resource Allowance determined by Federal law is considered available to the institutionalized spouse for the purpose of Medicaid eligibility determination.

20930 Resource Assessment and Eligibility

The State must promptly assess and document the couples' combined countable resources as of the beginning of the first continuous period of institutionalization on or after 9/30/89. The community spouse resource allowance is equal to 1/2 of a couples' combined countable resources as of the beginning of the first continuous period of institutionalization (but not to exceed the maximum permitted). The community spouse resource allowance is a set figure used to determine the amount of resources that will be used to determine institutionalized spouses' initial Medicaid eligibility for the current application period.

If the couple cannot adequately verify what their resources were at the beginning of the first continuous period of institutionalization, the eligibility worker may calculate the community spouse resource allowance based on the resources that can be adequately documented. This may be any point in time between date of admission and date of application. If the couple cannot document their resources, DSS will advise them that it cannot calculate the community spouse resource allowance.

20950 Initial Eligibility Determinations

Determine couples' combined countable resources for the month of application. Deduct from the couples' countable resources owned at the time of application a protected amount which is the greater of the following amounts:

the community spouse resource allowance (provided it does not exceed the maximum)

OR

the current State spousal share ($25,000)

Compare the remaining resources to the Medicaid resource limit of $2,000. If the remaining resources are over $2,000, the institutionalized spouse is ineligible until the combined countable resources are reduced to the greater of the following:

the community spouse resource allowance plus $2000

OR

the current State spousal share ($25,000) plus $2,000

An institutionalized spouse who (or whose spouse) has excess resources shall not be found ineligible per Section 1924 (c)(3)(C) of the Social Security Act where the state determines that denial of eligibility on the basis of having excess resources would work an undue hardship. Resources may be depleted in whatever manner the client/spouse wishes as long as there is no transfer for less than fair market value. See Section 20350.6 Transfer of Assets .

Once eligibility has been established, resources not used to determine eligibility for institutionalized spouses (i.e., the amount of spousal resource allowances) may be transferred to community spouses to assist such spouses in meeting their needs in the community. Thus, resources are not merely deemed available (or attributed) to community spouses in initial eligibility periods, but are actively made available to meet their needs in the community. Spouses who intend to transfer resources for this purpose are encouraged to do so as soon as is practicable before the first regularly scheduled redetermination of eligibility under.

Resources transferred to community spouses as well as other specified parties, without receiving fair market value for the property transferred, do not adversely affect continuing eligibility of institutionalized spouses. See Section 20350.6 Transfer of Assets

NOTE: Although the revised transfer of assets provisions allow the institutionalized spouse to transfer all of his or her resources to the community spouse without regard to the resource allowance, the initial eligibility determination will still attribute resources in excess of the community spouse allowance to the institutionalized spouse.

After eligibility has been determined the eligibility worker must provide a written notice to both spouses including the following information as appropriate:

the amount of combined countable resources at the beginning of the first continuous period of institutionalization;

the method used to compute the community spouse resource allowance, and

institutionalized spouses' right to rebut through a fair hearing ownership or availability of income and resources.

This policy relates to the procedure described in §1924(d) of the Social Security Act (42 U.S.C. §1396r-5) for increasing the amount of the married couple’s resources that are not counted in determining the institutionalized spouse’s eligibility for Medicaid, in order to protect income for the spouse who is remaining in the community (community spouse).

Section 6013 of the Deficit Reduction Act of 2005 (Public Law 109-171), enacted on February 8, 2006, mandates the State must consider all income of the institutionalized spouse that can be allocated to the community spouse, in order to bring the community spouse’s income up to the minimum monthly maintenance needs allowance (MMMNA), before raising the community spouse’s resource allowance to adequately provide for that income.

The income first methodology requires that an institutionalized spouse who applies for Medicaid must first divert income to his or her community spouse (who is not applying for Medicaid) before the institutionalized spouse may increase the amount of the couple’s resources that would be protected from consideration in evaluating the institutionalized spouse’s Medicaid eligibility. This is referred to as the “income first” methodology for determining the extent of protection of the couple’s assets and applies to transfers and allocations of income and resources made on or after the date of enactment by individuals who become institutionalized spouses on or after such date.

10 DE Reg. 283 (10/01/06)

20960 Exemptions to Minimum Resource Allowance

If there is a court order against an institutionalized spouse for the support of the community spouse which requires a greater resource allowance than that determined above, that amount shall be used for determining initial and ongoing eligibility. This would not be considered a transfer.

20970 Fair Hearings

Either spouse can appeal the computation of the 1/2 spousal share, how resources are calculated for initial eligibility purposes, or the amount of the community spouse resource allowance. In addition, if either spouse establishes that the resource allowance is inadequate to bring the community spouse's income up to the minimum income allowance level + excess shelter, the resource allowance can be increased so that this level is reached.

This would likely occur in instances in which the spouses' combined income falls below the minimum income allowance level. The community spouse may need income generated from resources to supplement existing income. Hearings requested on the basis of these computations must be conducted within 30 days from the date of request.

In nursing facility cases with a community spouse, the institutionalized spouse can make a request or file an appeal to increase the community spouse resource allowance (CSRA) to produce additional income for the community spouse. The hearing officer, as appropriate, may then increase the CSRA to an amount that is adequate to produce income that equals, but does not exceed, the MMMNA.

For Home and Community Based Services Waiver applicants/recipients see DSSM 20720.2.

10 DE Reg. 283 (10/01/06)

20980 Continuing Eligibility

Beginning in the month following the month in which the institutionalized spouse is determined to be eligible, no resources solely owned by the community spouse shall be deemed available to the institutional spouse. Thus, to benefit from the community spouse resource allowance, the institutionalized spouse will need to actually transfer sufficient resources to equal the amount of the allowance to the community spouse so that those resources will not cause ineligibility at redetermination.

20990 Income Rules

Income eligibility is determined by considering the income of the institutionalized spouse only. The sole deduction taken from the gross income before comparing to the income limit is the $20 disregard. Neither the community spouse income allowance nor the family allowance may be deducted to bring the income below the income limit. Income in both spouses names is considered to be equally available to both spouses within the following guidelines.

1) If payment of income is made solely in the name of the institutionalized spouse or the community spouse, the income shall be considered available only to that respective spouse.

2) If payment of income is made in the names of the institutionalized spouse and the community spouse, one-half of the income shall be considered available to each of them; and

3) If payment of income is made in the names of the institutionalized spouse or the community spouse or both, and to another person or persons, the income shall be considered available to each spouse in proportion to the spouse's interest (or, if payment is made with respect to both spouses and no such interest is specified, one-half of the joint interest shall be considered available to each spouse).

4) Consider available to each spouse one-half of any income which has no instrument establishing ownership.

In the case of a trust, income shall be considered available to each spouse as provided in the trust, or, in the absence of a specific provision in the trust, use the guidelines specified for non-trust property.

20995 Continuing Eligibility

After an institutionalized individual has established eligibility for Medicaid, the state must protect part of the individual's income for the community spouse. Protect enough income to equal the community spouse income allowance.

After eligibility has been determined, income paid solely to one spouse is attributed only to that named spouse. If income is paid to both it is attributed to both in equal parts.

Post-eligibility determination is revised to allow the following deductions from the income of the institutional spouse. The deductions must be taken in the following order.

a. Personal Needs Allowance for the institutional spouse

The personal needs allowance amount is $30 per month for SSI recipients, and $44 per month for all others. If the institutionalized spouse is employed, personal needs may range from $50 up to the Adult Foster Care rate per month.

b. Community Spouse Income Allowance

The community spouse monthly income allowance is the amount of income necessary to bring the spouse's monthly otherwise available income up to:

the applicable percent of the FPL for two, plus

an additional amount for excess shelter

The total amount available to the community spouse may not exceed “Cap for Minimum Monthly Maintenance Standard. This standard usually changes each January based on the Consumer Price Index for Urban Consumers.

c. Family Allowance.

d. Items for which protection of income has been approved by the Long Term Care Operation’s Administrator and/or incurred medical expenses of the institutionalized spouse.

10 DE Reg. 703 (10/01/06)

The financial eligibility worker must take into account amounts for incurred medical expenses of the institutionalized spouse within reasonable limits as defined by the State. These are expenses that are not covered by any third party payor and for which the couple is responsible. Questions regarding what constitutes necessary medical or remedial care and what constitutes reasonable limits should be referred to and resolved by the Medical Review Team.

Incurred expenses for medical or remedial care that are not subject to payment by a third party, include--

1) Medicare and other health insurance premiums, deductibles or coinsurance, and

2) necessary medical or remedial care recognized under State law but not covered under the state plan under this title, subject to reasonable limits the State may establish on the amount of these expenses.

If court-ordered support for the community spouse is greater than the calculated community spouse income allowance, the amount of the support is to be recognized as the income allowance. For example, if the institutionalized spouse was ordered to pay $200/month to the community spouse, that amount would be allowed and deducted even if it exceeded the calculated income allowance.

Either spouse can appeal the amount of the monthly income allowance or how the income otherwise available to the community spouse was determined. In addition, the allowance can be adjusted higher than that allowed above if they can show that additional income is necessary due to "exceptional circumstances resulting in significant financial duress."