Medicaid planning is often misunderstood, especially for married couples. Many people believe that if one spouse needs nursing home care, the other spouse must spend almost everything before Medicaid will help. In Louisiana, that is not true. With proper planning, married couples can protect a significant portion of their income and assets while still qualifying for Medicaid benefits.
What Is Medicaid?
Medicaid is a joint federal and state program that helps pay for long-term care, including nursing home care. Louisiana follows federal Medicaid rules but also has its own state guidelines. Understanding how these rules apply to married couples is essential to protecting your financial future.
How Medicaid Views Married Couples
When one spouse needs Medicaid for nursing home care, that spouse is called the institutionalized spouse. The spouse who continues living at home is known as the community spouse. Medicaid rules are designed to prevent the community spouse from becoming impoverished.
Only the institutionalized spouse must meet Medicaid’s strict financial limits. The community spouse is allowed to keep a certain amount of assets and income without affecting eligibility.
Asset Limits and the Community Spouse Resource Allowance
In Louisiana, Medicaid looks at the couple’s combined assets. Some assets are considered countable, such as bank accounts, investments, and additional property. Other assets are exempt, including the primary residence, one vehicle, household belongings, and certain prepaid burial plans.
The community spouse is allowed to keep a portion of the couple’s countable assets under the Community Spouse Resource Allowance. This amount changes periodically but is intended to provide financial security for the spouse remaining at home. Assets above this limit may need to be spent down or restructured in a lawful way before Medicaid eligibility is approved.
Income Rules for Married Couples
Income is treated differently from assets. The institutionalized spouse must meet Medicaid’s income limit. Most of that spouse’s income is typically required to be paid toward the cost of care, except for a small personal needs allowance.
The community spouse is entitled to keep their own income. In some cases, the community spouse may also receive part of the institutionalized spouse’s income if their own income falls below the Minimum Monthly Maintenance Needs Allowance. This rule helps ensure the spouse at home can still pay basic living expenses.
Transfers Between Spouses and the Look-Back Period
Medicaid has a five-year look-back period for asset transfers. This means Medicaid reviews financial transactions made in the five years before applying for benefits. Transfers made for less than fair market value can result in penalties.
However, transfers between spouses are generally allowed and do not trigger penalties. This makes spousal transfers a powerful planning tool when used correctly and at the right time.
Common Medicaid Planning Strategies
Married couples in Louisiana often benefit from strategies such as asset reallocation, Medicaid-compliant annuities, income adjustments, and proper use of exempt assets. Timing is critical, and mistakes can delay eligibility or cause unnecessary financial loss.
In addition, because Medicaid rules are complex and frequently change, do-it-yourself planning can be risky. A strategy that works in one situation may not work in another.
How Losavio & DeJean, LLC Can Help
Medicaid planning is not just about qualifying for benefits. It is about protecting your spouse, your home, and your peace of mind. Losavio & DeJean, LLC helps married couples throughout Louisiana understand their options and develop personalized Medicaid planning strategies that comply with the law while preserving as much as possible.
If you or your spouse may need long-term care, early planning can make a meaningful difference. Speaking with an experienced elder law attorney can help ensure you make informed decisions during a challenging time. Contact Losavio & DeJean, LLC today to learn more.