Key 2014 Dollar Limits for Medicaid Long-Term Coverage Released

The Centers for Medicare & Medicaid Services (CMS) has released the 2014 federal guidelines for how much money the spouses of institutionalized Medicaid recipients may keep and the limit on how much a home can be worth for its owner to still qualify for Medicaid.

In 2014, the spouse of a Medicaid recipient living in a nursing home (called the “community spouse”) may keep as much as $117,240 without jeopardizing the Medicaid eligibility of the spouse who is receiving long-term care. Called the “community spouse resource allowance,” this is the most that a state may allow a community spouse to retain without a hearing or a court order. While some states set a lower maximum, the least that a state may allow a community spouse to retain in 2014 will be $23,448.

Meanwhile, the maximum monthly maintenance needs allowance for 2014 will be $2,931. This is the most in monthly income that a community spouse is allowed to have if her own income is not enough to live on and she must take some or all of the institutionalized spouse’s income. The minimum monthly maintenance needs allowance – the income level below which a state may not allow a community spouse to fall if income from the institutionalized spouse is available — is $1,938.75 in the lower 48 states ($2,422.50 for Alaska and $2,231.25 for Hawaii).  This figure took effect July 1, 2013, and will not rise until July 1, 2014.

In determining how much income a particular community spouse is allowed to retain, states must abide by this upper and lower range. Bear in mind that these figures apply only if the community spouse needs to take income from the institutionalized spouse. According to Medicaid law, the community spouse may keep all her own income, even if it exceeds the maximum monthly maintenance needs allowance, since the minimum monthly maintenance needs allowance doesn’t apply to the community spouse.

Home Equity Limits

Medicaid will not cover long-term care services for applicants whose homes are valued above a certain limit.  For 2014, that limit is $543,000, although states have the option of increasing this equity limit to $814,000. However, this is irrelevant in Virginia since Virginia does not exempt the former home of an institutionalized individual unless her spouse or her minor or disabled child continues to live in the home, in which case there is no limit as to the value of the home. In Virginia, absent a spouse or minor or disabled child living in the home, an institutionalized individual must make reasonable efforts to sell her former home, regardless of its value, six months after institutionalization, and must not sell the home for less than its tax assessed value without running afoul of transfer of asset penalties.

In addition, the former home of an institutionalized individual may be transferred free of Medicaid penalty to a sibling who has an equity interest in the home, if the sibling resided in the home for at least one year before the institutionalized individual entered an institution.

These new figures (except for the minimum monthly maintenance needs allowance) take effect on January 1, 2014.

For further reading, see protections for the healthy spouse and Medicaid’s asset rules.