Medicaid “spousal impoverishment” rules exist to protect married people who need Medicaid-covered long term services from making the difficult choice of either going without services or leaving the spouse still living at home with little income or resources. Originally the rule protected the spouse remaining at home and in the community from impoverishment when the other spouse entered a nursing home.
The Affordable Care Act section 2404 provided an important amendment that expanded spousal impoverishment protections to include spouses of Home and Community-Based Services (HCBS) beneficiaries. These rules have been in effect since 2014, but states haven’t always been in compliance.
Advocates pushing states to comply with the rule can now refer to new guidance from the Centers for Medicare & Medicaid Services (CMS) describing how states must apply the statute in making Medicaid eligibility determinations.
- Under the statute, an individual must be eligible for HCBS in order for the protections to apply, and CMS interprets this to mean individuals must meet the nonfinancial eligibility requirements for HCBS.
- For those eligible through use of the spousal eligibility rules based on their need for HCBS, the statute does not require that they actually receive the HCBS for which they are eligible. This rule will apply, for example, to clients who are on a waiting list for a waiver.
- CMS provides additional guidance on what type of HCBS an applicant must be eligible for in order for spousal impoverishment rules to apply.
The guidance includes clarification on how the expanded application of spousal impoverishment rules applies in post eligibility treatment of income (PETI) cases and the rule’s applicability to individuals deemed eligible for services under the Modified Adjusted Gross Income (MAGI).