How can I qualify for Medicaid if I'm retired but my spouse is working?
We often get calls in the office from clients who are in their late 60s or older who have high medical expenses that Medicare doesn’t fully cover. Sometimes they are in need of nursing home care, home care such as a home health aide or are simply fed up with constant co-pays and medical bills. However, their spouses are working and the income in the household is higher than the Medicaid permissible threshold. Nevertheless, the non-working (“community spouse”) can often qualify for Medicaid because their spouse can actually formally refuse to support them financially by signing a “spousal refusal”.
This sounds rather cold and many folks have a hard time digesting the concept of a devoted, caring spouse signing a “spousal refusal” document so that the spouse in need of Medicaid can become eligible. Nevertheless, the reality is such that a working or high income spouse can sign this “spousal refusal” form to be submitted along with the Medicaid application for the qualifying spouse. This is actually a typical way of applying for Medicaid and HRA, (the Human Resources Administration that processes Medicaid applications in NYC) and DSS (the Departments of Social Services that process Medicaid applications in Long Island and the rest of New York) have routinely been approving for many years. The meaning of the refusal is that the working spouse’s income will not be counted against the Medicaid applicant spouse. In fact, depending on the specifics of the couple’s earnings, some of the Medicaid applicant’s income can even be shifted to the community spouse. Likewise, the Spousal Refusal can be coupled with a sometimes necessary Pooled Trust that is used to shelter excess income (see my earlier Articles concerning Pooled Trusts on www.YadgarovaLaw.com for details). This same concept can be applied to the couple’s assets and so the community spouse can be eligible for and receive Medicaid even if the working spouse has a rather significant amount of assets. For example, in New York in the year 2016, the working spouse can keep up to the greater of $74,820 or one-half of the couple's total combined assets up to $115,920
Whether or not Medicaid will attempt to recover any income or assets from the refusing spouse (i.e. sue the spouse for refusing to support) largely depends on the amount of income/assets that the refusing spouse keeps. Anything higher than the above described asset limit will likely be recovered by Medicaid at least to some extent, as well as some income above $2,980.50 per month (depending on how much of the excess income belongs to the refusing spouse vs. the community spouse).