What are the Medicaid implications of a second marriage?

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Seniors who get remarried are often concerned about what will happen to their assets if their new spouse enters the nursing home in the future. They are concerned that their hard-earned assets they saved could be lost. They also want to make sure that when they die their assets will go to their children. Although the prenuptial agreement will protect the senior’s assets from claims of his surviving spouse when he dies, the prenuptial agreement does not protect his assets from his spouse’s nursing home expenses. Seniors who have entered into second marriages are often surprised to learn that the prenuptial agreement that specified that their spouse had no claim to their assets does not prevent Medicaid from counting the assets of the spouse at home in determining Medicaid eligibility.

Medicaid is the governmental program that pays nursing home costs when a senior runs out of assets. Until the nursing home resident has less than $2,000 of countable assets, he must pay his own nursing home costs. When countable assets are less than $2,000, Medicaid will begin paying the senior’s nursing home costs.

However, just because the nursing home spouse has less than $2,000 in assets does not necessarily mean that the nursing home spouse will be eligible for Medicaid. Instead, despite the prenuptial agreement, Medicaid looks at the assets of both spouses. The rules for determining Medicaid eligibility are exactly the same for couples with prenuptial agreements and those without them.

This does not mean that all assets of both spouses must be used up before Medicaid will begin paying nursing home costs. Congress passed “spousal impoverishment rules” to keep the spouse at home from having to be completely impoverished before Medicaid payments kick in.

Under these rules, the amount that the at-home spouse can keep is based on the resources that the couple has at the time one spouse enters an institution. Resources are counted (often referred to as a “snapshot” of resources) as of the date a senior first begins a period of continuous institutionalization. This can be when a senior enters a nursing home or when he first entered a hospital. So, if a spouse first enters a hospital prior to a nursing home, the snapshot is taken based on the date of admission to the hospital, not the nursing home. The spouse at home is permitted to keep half of the couple’s countable assets as of the snapshot date, up to $101,640; but the spouse in the nursing home is limited to $2,000 of countable assets.

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