Medicaid Spotlight: What is Spousal Refusal?

Federal law allows a spouse who requires long term care to transfer assets to the other spouse in order to receive Medicaid benefits immediately. Transfers between spouses are exempt, meaning there is no penalty or waiting period even if the transfers are made within the 5-year look back period.

Once the assets have been transferred to the spouse in the community (the spouse not receiving Medicaid), that spouse may then have assets over the allowable resource limit ($126,420 for 2019). The community spouse may also have income in excess of the income allowance ($3,160.50 for 2019). In that case, the spouse in the community must sign a Spousal Refusal.  This is a written statement submitted in support of a Medicaid application that simply states that the spouse in the community refuses to make their income and resources available to the Medicaid applicant. While this allows the Medicaid applicant to receive Medicaid benefits, the spouse in the community must be aware of the implications.

What You Need To Know:

The Law:

The purpose of spousal refusal is to protect the spouse in the community from becoming impoverished due to their spouse’s need for long term care. However, the law gives the Medicaid agency the right to seek contribution from a refusing spouse for the cost of care expended by the Medicaid program.

Why it Works:

Medicaid is only permitted to seek reimbursement from a spouse at the Medicaid rate, which is about one-third less than the private pay rate. Therefore, even if the Medicaid agency makes a demand for reimbursement, it is less expensive for your spouse to receive long term care through the Medicaid program than for you to pay out of pocket for such care.

What May Happen:

The spouse in the community may receive a letter from the Medicaid agency requesting information regarding their assets and income. This correspondence may also include a demand to repay the Medicaid program.

What You Should Do:

If you signed spousal refusal in connection with a Medicaid Application and you receive such a request for information, contact us right away. We will discuss with you your options to make sure you are prepared and protected.

What You Should NOT Do:

Do NOT respond to any letters without first speaking to your Cona Elder Law attorney. Contact us immediately if you get a spousal inquiry or demand letter.   

There are several tools available for addressing spousal refusal lawsuits, which may enable you to negotiate a Medicaid lien. It is important to seek representation by the experienced

attorneys at Cona Elder Law who handle litigation and specifically spousal refusal litigation if recovery is sought.

As always, contact us if you have any questions. Our Elder Law attorneys are always available to address your questions and concerns.  Call us at 631.390.5000 or click here.