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Taking Care of Mom and Dad: Spousal Coverage

Often, one spouse is confined to a nursing home and the other spouse remains at home. Since the income and assets of both spouses are considered when determining eligibility for Medicaid nursing home coverage, the process of income and asset depletion could -- and often did -- reduce the stay-at-home spouse to the point of poverty to pay for the confined spouse. To remedy the situation, Congress passed the Spousal Impoverishment Act, which protects a portion of the income and assets that a stay-at-home spouse may retain without terminating Medicaid eligibility for a confined spouse.

Before the Act, the healthy spouse would either be driven in poverty or even divorce the ill spouse so that he or she could qualify as a single person. This created a generation of so-called "nursing home widows," who had to take drastic measures to make sure their mates received decent care.

Under Spousal Impoverishment Act, the healthy spouse was allowed to keep some of the couple's joint monthly income (up to a maximum of $1,565 of joint monthly income) and joint assets (a minimum of the first $12,000 of assets, not to exceed to maximum of $60,000 of assets). These amounts are indexed for inflation and increase annually.

The federal law provides a degree of protection for a healthy spouse, but it is not a substitute for insurance. Without long-term care insurance, most middle- and upper-class families would still be exposed to a considerable reduction in family resources if an extended stay in a nursing home became necessary.

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