Older adults and people with disabilities overwhelmingly want to live at home as they age. Policymakers have sought to make this choice a reality by enacting Medicaid policies that improve access to home and community-based services (HCBS). Congress has helped these efforts by expanding a Medicaid eligibility rule, known as the spousal impoverishment protection, to individuals eligible for HCBS. The protection makes it possible for an individual who needs a nursing home level of care to qualify for Medicaid, while allowing their spouse to retain a modest amount of income and resources.
Congress last reauthorized the spousal impoverishment protection in 2022.[1] But the protection is set to expire on September 30, 2027. Congress must again take action to ensure that older adults and people with disabilities have this financial protection that enables them to live at home with their spouses.
What Is the Spousal Impoverishment Protection?
Since 1988, states have been required to use a modified Medicaid eligibility rule for spouses when one spouse needs institutional long-term care.[2] This rule allows the so-called “institutional spouse” to qualify for Medicaid as a household of one, while allowing the “community spouse” to keep income and assets so they will not become impoverished. This protection has helped ensure that community spouses can continue to pay for rent, food, and medication while their spouse receives their needed care in a facility.
The law, as originally written, did not account for individuals receiving services at home or in other community-based settings. A married older adult or individual with disabilities would have to make an impossible choice—forego needed care so they could continue to live with their spouse or leave home and move into a nursing facility so they could qualify for Medicaid. In 2010, Congress remedied this unfairness by requiring states to expand the definition of “institutional spouse” to include all Medicaid-eligible individuals who need a nursing home level of care but can receive that care in their home.[3]
This expansion of the protection to HCBS accomplishes three goals:
- First, it allows married couples to continue to live together without endangering the health, well-being, or financial security of the family.
- Second, it ensures people with disabilities, including older adults, have a meaningful choice to age in place and to stay in their community.
- Finally, it removes the incentive for individuals eligible to receive Medicaid long-term care to choose more expensive nursing facilities, because they can now receive the needed services in their home.
How Has the HCBS Spousal Impoverishment Protection Helped Real People?
In his 50s, Mr. Levin suffered a severe stroke and his life changed overnight. He became legally blind, lost his ability to speak more than a few words, and was never able to work again. Prior to the implementation of the spousal impoverishment protection, he was ineligible for Medicaid because he and his wife had more savings than the strict limit of $2,000. His wife was unable to leave his side because his needs were so severe.
When the spousal impoverishment protection was expanded to HCBS, he was able to qualify for Medicaid. Once Mr. Levin began receiving in-home care, his wife enrolled in nursing school. If the spousal impoverishment protection ends, he will lose Medicaid and his wife will have to stop working as a nurse to take care of her husband.
Congress Should Make the HCBS Spousal Impoverishment Protection Permanent
As critical as it is, expansion of the protection against spousal impoverishment to people who need HCBS is only temporary. Letting this protection lapse will hurt families and force more people out of their homes and into more costly nursing facilities, where they are separated from their spouses.
We urge Congress to make the HCBS spousal impoverishment protection permanent, so older adults and people with disabilities can age in place and with dignity.
