Q. I have been in a Registered Domestic Partnership for several years, and my partner may soon need to apply for a Medi-Cal nursing home subsidy. How will Medi-Cal treat our finances in that situation?
A. The good news is that Medi-Cal will now evaluate your partner’s financial need for a subsidy based upon the more favorable rules formerly applicable only to married couples in traditional relationships. The new rules will be retroactive to January 1, 2012, and will now allow same-sex spouses and Registered Domestic Partners (“RDP’s”) in California to enjoy most of the spousal benefits formally applicable only to spouses in traditional marriages. These new rules will affect asset limitations, income allocations, and inter-spousal transfers:
Asset Limitation: When a spouse applies for a Medi-Cal subsidy to help with the cost of nursing home care, his or her spouse at home is entitled to retain a protected “nest egg”, i.e. an amount of savings and other non-exempt assets which are not considered in determining the ill spouse’s need for a Medi-Cal subsidy. That “nest egg” is called the Community Spouse Resource Allowance (“CSRA”), and currently exempts up to $115,920 in the name of the at-home spouse. Additionally, the nursing home spouse can keep an additional $2,000 in his own name. In order to comply with these rules, married spouses may freely transfer resources between them in order to fully optimize their respective exemptions and thereby qualify the ill spouse for a Medi-Cal subsidy. Formerly, however, persons in same-sex marriages and RDP relationships did not enjoy this right, and any attempt to transfer resources between them was penalized.
Income Allocation: The law formerly permitted only married couples to reallocate income between them in order to provide the At-Home spouse with sufficient income to meet his or her basic needs for support, measured by what is called the Minimum Monthly Maintenance Needs Allowance (“MMMNA”). That amount is set by law, is annually adjusted for inflation and is currently $2,898 per month. Where the At-Home spouse does not have sufficient income in his/her own name to fully comprise the MMMNA, he or she is entitled to an income allocation from his or her spouse in order to make up any “shortfall.” The ill spouse’s monthly co-pay for care is determined only after making this spousal income allocation. This right to a Spousal Income Allocation often reduces the ill spouse’s share of cost to a very modest amount and, in some cases, to as low as “0″, thus implementing the law’s protective purpose of avoiding the impoverishment of the At-Home spouse. Now, same-sex couples and RDP’s will enjoy this same right.
Right to Court Orders: in appropriate circumstances, couples in traditional marriages could apply to a judge for an order expanding the amount of the CSRA and/or MMMNA in order to protect more assets and/or income for the At-Home spouse. Now, same-sex couples and RDP’s will enjoy the same right in California.
While there are still some differences in treatment, the new California rules go a long way toward establishing parity between couples in traditional and in nontraditional relationships. In the future, there is even the possibility of complete equality of treatment, most likely depending upon how the US Supreme Court rules on the two pending marriage cases now before it.
Related article: ” New Medi-Cal Protections for Same-Sex Couples and RDP’s Coming”; Medi-Cal’s “All County Welfare Directors Letter ACWDL 12-36 (December 10. 2012); scroll down to ACWDL 12-26.