Thursday, October 18, 2012

New Medicaid Spousal Impoverishment & Aging Waiver Qualification Figures for 2013



On October 16th, the Social Security Administration released its cost-of-living adjustment (COLA) for 2013. And the U.S. Department of Labor Bureau of Labor Statistics has recently released the consumer price index figures for September. These important numbers will impact tens of millions of seniors in 2013.

Increase in Social Security and SSI benefit payments

Monthly Social Security and Supplemental Security Income (SSI) benefits for nearly 62 million Americans will increase 1.7 percent in 2013. The 1.7 percent COLA will begin for more than 56 million Social Security beneficiaries with payments they receive in January 2013.  Increased payments to more than 8 million SSI beneficiaries will begin on December 31, 2012.

The Social Security Administration also released the SSI Federal PaymentStandards (Federal Benefit Rate) for 2013 as follows:

  • Individual: $710/mo. (an increase from $698/mo. in 2012)

  • Couple: $1,066/mo. (an increase from $1,048/mo. in 2012)

Increase in Aging Waiver Program Income Limit

The Federal Benefit Rate (FBR) is used to determine qualification for many Medicaid funded benefit programs including the Pennsylvania Department of Aging (PDA) Aging Waiver program. The income limit for this home Waiver program is equal to 300% of the SSI Federal Benefit rate for an individual. 

This means that effective January 1, 2013 the new income ceiling should be:

  • $2,130 per month = Aging Waiver Program Income Limit for 2013

The Aging Waiver program is a vital support that can allow frail seniors to live in their homes rather than an institution. But it is difficult for individuals with income above this 300% FBR limit to qualify. However, it is possible in some cases. If you are above the income limit but would like to qualify for home Waiver services,  discuss the qualification rules with an experienced elder law attorney. 

New Protected Resource and Maximum Income Levels for the Community Spouse

The Federal Government has also published the consumer price index for all urban consumers, all items, U.S. city average (the CPI-U) for the month of September 2012. Using these figures it is possible to project some 2013 numbers that are critical to planning for married couples where one spouse is seeking Medicaid funded long term care benefits. 

In general, when your spouse is in a nursing home or needs home care under the Aging Waiver program, he or she will not qualify for Medicaid benefits until your combined savings are reduced to a certain level.  That permitted level of so-called "available resources" varies with each situation.  For nursing facility residents, the general rule is that the community spouse can keep ½ of the amount of available resources that were owned by the couple on the date of admission to the nursing facility.  However, this standard protected "Community Spouse Resource Allowance" is subject to a ceiling and a floor. 

In addition to being allowed to keep the resource allowance, the community spouse is also entitled to have a certain level of income called the Monthly Maintenance Needs Allowance. The income allowance is also subject to a ceiling and a floor.  If the community spouse does not have the required level of income, the spouse may be allowed to keep some of the institutional spouse's income.  If the income diverted from the institutionalized spouse is still insufficient, the community spouse may be able to keep additional resources.

These community spouse resource and income allowances are adjusted annually.  Although the new figures have not yet been announced by the Centers for Medicare and Medicaid Services, by law they are based on the consumer price index for all urban consumers published by the Bureau of Labor Statistics (the CPI-U) for September of the prior year. 

Thus, I can project that effective January 1, 2013, the new standard community spouse allowances should be as follows:
·       Minimum Community Spouse Resource Allowance = $23,184.
·       Maximum Community Spouse Resource Allowance = $115,920.
·       Maximum Community Spouse Monthly Income Allowance = $2,898.

Note: The current Minimum Monthly Income Allowance remains at $1,891.25 - it will be adjusted on July 1, 2013.

Readers should also note that a Community Spouse can often protect resources in excess of the above amounts through a number of planning techniques including the purchase of a Medicaid Annuity. (Be sure to consult an experienced elder law attorney before purchasing a Medicaid Annuity.)

Probably more than you want to know

Those readers who want to dig deeper into how the community spouse figures are determined can check the federal law at 42 U.S.C. § 1396r-5(f)(2)).  That statute established the initial community spouse resource allowance at levels of $12,000 minimum and $60,000 maximum for 1989 based on the CPI-U for September 1988.  It provided that these levels be increased by the same percentage as the percentage increase in the CPI-U between September 1988 and the September before the calendar year involved.

The CPI-U for September 1988 was 119.8The CPI-U for September 2012 was 231.407. This means that the CPI-U has increased 93.1611% over the period. I’ve rounded this percentage to 93.2%. 

As a result, the new community spouse figures for 2013 should be:

  • $12,000 + $11,184 = $23,184 - Minimum Resource Allowance for 2013

  • $60,000 + $55,920 = $115,920 – Maximum Standard Resource Allowance for 2013

The statute also established an initial maximum monthly maintenance needs allowance of $1,500 a month. (See 42 U.S.C. § 1396r-5(d)(3)(C)). This figure is increase in the same manner, as follows:

  • $1,500 + $1,398 = $2,898 – Maximum Monthly Maintenance Needs Allowance for 2013

The figures ultimately announced by the Centers for Medicare and Medicaid Services could be a little different than those above due to rounding. But the above projections should be pretty close, if not spot on. 

Thanks to my friend, fellow Elder Law Attorney Robert Clofine of York, Pennsylvania, for being the first to make note of these updated figures. 

Further Reading:
The Medicaid Long Term Care Eligibility Fact Sheet, Marshall, Parker and Associates.
Pennsylvania Care Management (provides Medicaid Annuities in Pennsylvania).
Historical CPI-U figures can be found online at ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt.

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