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How Connecticut Medicaid Works in 2014

Estate Planning, Connecticut Medicaid, Title 19

Each year brings a new set of important figures for Medicaid (also known as Title 19) in Connecticut.  The new figures will only have meaning, however, if you understand how they work.  We provide the new figures with an example so you can understand how Medicaid works in Connecticut in 2014.

Here are the Connecticut Medicaid figures that apply in 2014:

Community Spouse Protected Amount (Maximum)

$ 117,240.00

 

Community Spouse Protected Amount (Minimum)

$   23,449.80

 

Monthly Maintenance Needs Allowance(Maximum)

$     2,931.00

/mo.

Monthly Maintenance Needs Allowance(Minimum)*

$     1,938.75

/mo.   

Home Equity Exemption

$ 814,000.00

 

Average monthly cost of care for penalty calculations*

$   11,581.00

 

Shelter Allowance**

$        581.63

 

Utility Allowance*

$        694.00

 

Personal Needs Allowance*

$          60.00

 

Connecticut Home Care Program for Elders (Medicaid)

 

 

Asset Limit

$    1,600.00

 

Income Limit

$    2,163.00

/mo.

*          Changes every July 1st

**       Changes every October 1st

Let’s take an example. Teresa, age 70, and Todd, age 69, live in Mystic, CT.  Teresa is out walking her dog, Skittles, and collapses from a heart attack.   Skittles starts barking and saves the day.  Todd comes running.   Teresa goes to the hospital on January 15, 2014, and stays for 4 days.   She is discharged to Overlook Nursing & Rehabilitation Center, a nursing home, which costs $14,000 per month.  They can’t afford this, and must apply to The Connecticut Department of Social Services (DSS) for Medicaid assistance.  

First, DSS will evaluate Teresa and Todd’s combined assets to determine if they are financially eligible.  Teresa and Todd have the following assets:

1.    A jointly owned home (with $300,000 equity),

2.    A joint checking account with $1,000,

3.    Todd has a bank certificate of deposit (CD) with a balance of $50,000,

4.    Teresa has a deferred annuity with a cash surrender value of $65,000.   

Total = $416,000 net worth

The house is an exempt asset under Medicaid as long as the spouse resides in it. Accordingly, they only have $116,000 in countable assets after excluding their home.  Unfortunately, even though Todd and Teresa have countable assets less than the maximum Community Spouse Protected Amount (CSPA) of $117,240, they cannot keep all of their countable assets.  DSS will divide Todd and Teresa assets in half and limit Todd to one-half of the countable assets.   This one-half the spouse gets to keep can be no more than a maximum of $117,240, and no less than the minimum of $23,449.80. 

Thus, under our facts Todd is limited to keeping $58,000 in countable assets in his name calculated as follows: Countable Assets (1,000 + 50,000 + 65,000) ÷ 2 = $58,000. Teresa can keep $1,600 in her name, which is the asset limit for an individual receiving Medicaid.  Between them they can keep $59,600.  To become eligible for Medicaid, Teresa and Todd must spend down $56,400 on eligible expenditures.  

Todd wants to know how much of Teresa’s income will go to the nursing home.   Todd has $1,750 of monthly gross income and Teresa has $1,500 of monthly gross income.  They have a mortgage payment of $500/month, real estate taxes of $500/month, and homeowners insurance of $200/month.  Connecticut gives Todd, the community spouse, a Community Spouse Allowance, which is determined by subtracting the community spouse's monthly gross income from what is known as the community spouse's Minimum Monthly Needs Allowance (MMNA).The calculation of Todd’s MMNA is shown in the following table.

 

AMOUNT

Total Monthly Shelter Costs ($500 monthly mortgage payment + $500 monthly property taxes + $200 monthly homeowners insurance)

 

 

$1,200.00

Standard Utility Allowance (as of 10/1/13)

694.00

LESS Standard Shelter Allowance (as of 7/1/13)

-581.63

Additional expenses from exceptional circumstances resulting in financial duress that are established at a Medicaid Fair Hearing

0

PLUS Minimum Monthly Maintenance Needs Allowance (as of 7/1/13)

 

1,938.75

Tentative Monthly Maintenance Needs Allowance

$3,251.12

Since the amount calculated above is greater than the maximum Monthly Maintenance Needs Allowance of $2,931, Todd’s MMNA is $2,931. From that, we subtract Todd’s monthly gross income of $1,750 to arrive at his Community Spouse Allowance of $1,181. Because Teresa’s monthly gross income of $1,500 exceeds Todd’s Community Spouse Allowance of $1,181, Todd can keep $1,181 of Teresa’s income.  That leaves $319 per month for Teresa.  Teresa receives her personal needs allowance ($60 as of 7/1/13) and the remaining amount ($259) is applied to outstanding bills for Teresa’s medical care or her nursing home costs.

If Teresa goes home and applies for the Medicaid under the Connecticut Home Care Program for Elders, she will also have to meet the Medicaid income requirements.  For 2014, Teresa can have no more than $2,163 in monthly income to qualify for Medicaid at home.  Fortunately, her income is only $1,500 so her income does not exceed the income limit.

In another twist, Teresa gave $20,000 to her daughter, Lori, 3 years ago to help her buy a home.  Teresa is going to be ineligible for Title 19 for 2 months after she applies for Title 19 because she transferred assets to Lori within the 5 year look back period.  The penalty period is calculated as follows: $20,000 ÷ average monthly cost of care in Connecticut ($11,581) = 1.7 months. The penalty will not start to run, though, until she applies for Title 19 so she might as well go ahead and apply once she spends down to the $1,600 asset limit.  She may have to borrow money from Lori or other family members during the penalty period to pay the nursing home.

About the Author

In his 30 years in practice, Joe has become a leader in the trust and estate and elder law field. He is a Fellow in the Amercian College of Trust & Estate Counsel (ACTEC). He serves on the Executive Committees of the Estates & Probate Section and the Elder Law Section of Connecticut Bar Association (CBA). He has served as chair of the continuing legal education committee of CT-NAELA and the CBA Elder Law Section. Joe has led many seminars for CT-NAELA and the Elder Law Section on topics as diverse as evidence in conservatorship proceedings, special needs planning in the family law setting, veterans’ benefits, and home health care strategies.