Spousal Impoverishment Protections
Spousal impoverishment protection policies protect the financial interests of spouses of individuals applying for Medicaid LTSS services by enabling them to retain a portion of the couple’s assets and income. Without these policies, the spouse who is not applying for Medicaid might be forced to spend down their assets or deplete their income to cover the costs of care for their spouse. Twelve states allow the community spouse—that is, the one who is not applying for Medicaid—to retain 100 percent of a couple’s assets up to the federally allowed maximum of $148,620 in 2023. Illinois allows spouses to retain 100 percent of a couple’s assets up to $120,780. All other states allow spouses to retain only 50 percent of a couple’s assets, or a total of $74,310, except for South Carolina which only protects up to $66,480 of a couple’s income.
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This indicator gives credit for states that, under the Medicaid Community Spouse Resource Allowance (CSRA), provide the most allowance for community spouses – the spouse of a Medicaid applicant that is not applying for Medicaid LTSS. These policies are designed to prevent the impoverishment of community spouse in the event their spouses need Medicaid LTSS.
States receive full credit for allowing a community spouse to retain the maximum allowance set by the federal government ($148,620 in 2023). All other states set their asset limits to the federal minimum, with the exception of Illinois, which received half credit in 2023 for allowing community spouses to retain 100% of their $120,780 asset limit, significantly more than the federal minimum but less than the maximum.
American Council on Aging