New Medicaid Bill Introduced on Spousal Impoverishment Rules

Typically, to financially qualify for Medicaid long-term services and supports (LTSS), a person must meet specific low-income and asset requirements. Marriage often makes working through those eligibility requirements more difficult. It can mean potentially placing a spouse in the position to “spend down” or bankrupt themselves to secure care support for their partner.

Home Health Care News reports in a recent article, “Medicaid Bill Would Prevent Spousal Impoverishment as Route to Home Care Coverage,” that as of August 2018, more than 73 million people combined were enrolled in Medicaid and the Children’s Health Insurance Program (CHIP). Those numbers are from federal Medicaid data; more than 66 million individuals were enrolled in Medicaid, while about 6.5 million were enrolled in CHIP.

In order to prevent self-induced bankruptcy to keep a spouse eligible for Medicaid, Congress created spousal impoverishment rules in the late 1980s. Those rules originally required states to protect part of a married couple’s income and assets to give the “community spouse” adequate living expenses, when determining nursing home financial eligibility. However, states were also given the option to apply the rules to home and community-based services (HCBS) waivers.

Section 2404 of the Affordable Care Act (ACA) changed that and required the spousal impoverishment rules to treat Medicaid HCBS and institutional care the same way. That law is set to expire at the end of December. That means that individual states would once again be the decision-makers, when it comes to spousal impoverishment in home care.

In 2018, all 50 states were applying the spousal impoverishment rules to HCBS waivers, and five states (Arkansas, Illinois, Maine, Minnesota, and New Hampshire) plan to stop applying the spousal impoverishment rules to some or all of their HCBS waivers, if Section 2404 expires at the end of the year.

With support from LeadingAge, the National PACE Association, the National Council on Aging and several other groups, U.S. Representatives Debbie Dingell (D-Mich.) and Fred Upton (R-Mich.) on Friday introduced the Protecting Married Seniors from Impoverishment Act. If the bipartisan piece of legislation passes, it would permanently extend spousal impoverishment protections for Medicaid beneficiaries receiving long-term care in a home or community care setting.

“Our long-term care system is broken,” Rep. Dingell said in a statement. “Seniors and their families already face too many challenges when navigating long-term care, and they should not have to get divorced or go broke, just to be eligible for the care they need.”

It’s not known the level of Congressional support the Protecting Married Senior from Impoverishment Act will get, but the fact that most states plan to continue protections on an optional basis is encouraging, LeadingAge President and CEO Katie Smith Sloan said in a statement.

“As a national organization, LeadingAge has consistently supported federal law establishing protections against spousal impoverishment,” Sloan said. “We support the legislation to extend the current protection.”

LeadingAge in Washington, D.C is an industry association that represents more than 6,000 not-for-profit senior care providers. If the Dingell-Upton bill fails, LeadingAge members in states that don’t plan to continue impoverishment protections will likely be negatively affected.

The National Academy of Elder Law Attorneys, Inc., the National Association for Home Care & Hospice, and AARP are the three organizations lobbying on issues, such as “spousal impoverishment” in the past two years.

Reference: Home Health Care News (November 19, 2018) “Medicaid Bill Would Prevent Spousal Impoverishment as Route to Home Care Coverage”

Will My Medicare Premiums Go Up Next Year?

The Centers for Medicare & Medicaid Services has recently announced that most seniors will pay $135.50 per month for Medicare Part B in 2019. That’s a bit of a nudge up from $134 per month in 2018.

Kiplinger’s recent article, “What You’ll Pay for Medicare Premiums in 2019,” reports that a few Medicare beneficiaries (about 3.5%) will pay somewhat less because the cost-of-living increase in their Social Security benefits isn’t big enough to cover the full premium increase. The “hold-harmless provision” keeps enrollees’ annual increases in Medicare premiums from rising above their cost-of-living increases in Social Security benefits, if their premiums are automatically deducted from their Social Security payments. Social Security benefits are increasing by 2.8% in 2019, which will cover the increase in premiums for most seniors.

Premium increases are also pretty slight for most higher-income beneficiaries. Who are they? Those with adjusted gross income plus tax-exempt interest income of more than $85,000, if single or $170,000, if married filing jointly. These people already pay a high-income surcharge. However, a new surcharge tier will apply in 2019 for people with the highest incomes. Thus, monthly premiums for higher-income beneficiaries will be between $189.60 to $460.50 per person, based on their income.

If your income is $85,001 to $107,000 (or $170,001 to $214,000 if filing jointly), your monthly premium will go from $187.50 to $189.60. Monthly premiums for singles with an income of $107,001 to $133,500 (joint filers with income of $214,001 to $267,000) will be $270.90 (that’s up from $267.90).  Premiums for singles earning $133,501 to $160,000 ($267,001 to $320,000 for joint filers) will increase from $348.30 to $352.20.

If your income was greater than that, your monthly premium for 2018 was $428.60. In 2019, again, there’ll be an extra surcharge tier for people with the highest income. These high-income surcharges for 2019, are typically based on 2017 income. You can contest the surcharge, if you’ve had life-changing events that may have dropped your income since then. This includes retirement, divorce or the death of a spouse.

If your income is in the range of $160,001 to $499,999 ($320,001 to $749,999 for joint filers), you’ll pay $433.40 per month. Single filers with income of $500,000 or more ($750,000 or more for joint filers) will pay $460.50 per month.

Deductibles will also go up in 2019: the deductible for Medicare Part A, which covers hospital services, will increase from $1,340 in 2018 to $1,364 in 2019. The deductible for Medicare Part B, which covers physician services and other outpatient services, will see a small increase from $183 to $185.

Reference: Kiplinger (October 12, 2018) “What You’ll Pay for Medicare Premiums in 2019”
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