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How Do The Spousal Impoverishment Protections Work In Colorado?

What happens when one spouse needs long-term care, but the other spouse doesn't? With nursing homes costing thousands of dollars each month, it's easy to imagine how one spouse can be left impoverished trying to pay for the long-term care of the other.

Fortunately for spouses who are not applying for Medicaid benefits, but have significant others who are, federal law provides him or her special income and asset protections ― otherwise known as spousal impoverishment protections.

Spousal Impoverishment Protections: The Basics

As its name suggests, the spousal impoverishment rules are designed to help the spouse who is still living in the community (the "community spouse") avoid becoming impoverished when his or her spouse (the "institutionalized spouse") needs expensive nursing home care.

Essentially, without these protection rules, the couple's jointly owned assets would be taken into account when determining the institutionalized spouse's eligibility for Medicaid ― meaning most of the couple's assets would likely have to be used to pay for the nursing home care of this spouse, thereby leaving little to nothing for the community spouse to live on. Thankfully, however, the spousal impoverishment rules can help prevent this.

Under these rules, the community spouse is permitted to retain a certain amount, which is referred to as the Community Spouse Resource Allowance (CSRA). In Colorado, the CSRA equals the total of the couple's assets and resources, but only up to a certain limit. In 2017, this limit is set at $120,900. However, it is also important to keep in mind that the CSRA is in addition to several resource exemptions that may apply to the institutionalized spouse seeking Medicaid, which means even more property may be protected.

Lastly, the spousal impoverishment rules may allow the community spouse to protect at least some of the institutionalized spouse's income, which is to be used to pay for the community spouse's basic needs. In 2017, this amount is limited to $2,981. However, when deciding how much of the institutionalized spouse's income to protect, all income sources of the community spouse will have to be taken into account.

Have Questions? Get Answers Today ― For Free.

Given the complexity of the spousal impoverishment rules, it is always best to speak with an experienced attorney should you have any questions. After all, the information above is simply a basic outline of what you may need to know.

For answers to even the most complex Medicaid-related questions, contact one of the knowledgeable lawyers at The Hughes Law Firm today. With multiple office locations throughout Colorado, including several in the Denver area, we can help no matter where you live. Contact us today for your free 20-minute phone consult. You can reach us online or call us at 303-268-3984.