The Monthly Maintenance Needs Allowance in Medicaid Planning

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Disclaimer: With Medicaid, VA, and insurance regulations frequently changing, past blog posts may not be presently accurate or relevant. Please contact our office for information on current planning strategies, tips, and how-to's.

Introduction to the Monthly Maintenance Needs Allowance

Regulations regarding asset and income allowances protect the interests of a Community Spouse (living at home) when the Institutionalized Spouse (residing in a nursing home) is seeking Medicaid benefits. These rules help the Community Spouse avoid impoverishment while still qualifying the Institutionalized Spouse for Medicaid benefits to pay for his or her long-term care needs.

The Institutionalized Spouse’s monthly income must be used to pay for long-term care, although he or she can keep a monthly Personal Needs Allowance and make certain medical deductions. The remaining amount is his or her monthly Medicaid co-pay. This co-pay can be further reduced if the Community Spouse does not make enough income to support his or her lifestyle. The Community Spouse might be entitled to all or part of the Institutionalized Spouse’s income (an “income shift”), which is the Monthly Maintenance Needs Allowance (MMNA).

Each state sets MMNA thresholds to determine whether an income shift can take place.

  • Some states have one standard MMNA, which simply means if a Community Spouse’s income is below the figure, he or she is entitled to an income shift from the Institutionalized Spouse. An income above the standard MMNA means no income shift will take place.
  • Most states have a maximum MMNA and a minimum MMNA. While the exact figures vary by state, most states have a minimum MMNA of $2,030.00 and a maximum of $3,023.00 (2017 figures).

Calculating the MMNA in a Minimum/Maximum State

The Community Spouse will always be entitled to at least the minimum MMNA of $2,030.00 (2017 figure). In other words, if a Community Spouse does not earn at least $2,030 per month on his or her own, all or part of the Institutionalized Spouse’s income may shift to the Community Spouse. Further, if the Community Spouse has high monthly shelter expenses, he or she qualifies for a MMNA above the minimum MMNA but still below the maximum MMNA ($3,023.00 in 2017).

Factors To Consider:

Shelter Standard

In most states, the Shelter Standard is $609.00 (2017 figure). Medicaid assumes that if the Community Spouse’s shelter expenses (such as mortgage payments, real estate taxes, or rent payments) do not exceed $609.00, he or she can afford the shelter expenses with just the minimum MMNA. However, if the Community Spouse’s shelter expenses exceed $609.00 per month, the MMNA is increased to compensate.

Standard Utility Allowance

The standardized utility expense is established by every state and is used in place of actual utility costs (such as electricity, water, and heat) to calculate total shelter costs. States calculate the standard utility allowance based on average utility costs throughout the State, so these figures can vary significantly across the nation. Since utility bills can vary every month, the Standard Utility Allowance is a simple addition.

MMNA Case Study

For example, consider a married couple named Larry and Linda.  Larry is a permanent resident of a nursing home in Missouri. He receives Medicaid benefits to assist in paying for his long-term care.  His Community Spouse, Linda, still resides at home.  Larry receives a monthly income of $2,500 from Social Security and a pension.  Linda receives a monthly income of $1,800 from Social Security. In addition, Linda pays the following monthly shelter expenses:

  • Homeowner’s insurance: $55.00
  • Mortgage payment: $900.00
  • Real estate taxes: $350.00

Linda is also responsible for the home’s utility bills.  Referencing the Missouri Standard Utility Allowance of $362, Linda adds this number to her monthly shelter expenses, for total monthly expenses of $1,667.00.

Total Monthly Expenses Equation

Since Linda’s monthly expenses are greater than the Shelter Standard of $609.00, she is entitled to an increased MMNA. After taking her total monthly expenses and subtracting the $609.00 Shelter Standard, Linda has excess shelter expenses of $1,058.00.

TKA_Total Monthly Expenses Equation_final-png-2

In Missouri, the minimum MMNA is $2,030.00; therefore, Linda is entitled to a dollar-for-dollar increase based on her excess shelter expenses, not to exceed Missouri’s maximum MMNA of $3,023.00.  Adding  $2,030.00 and $1,058.00 reveals a total of $3,088.00. Since $3,088.00 exceeds the maximum MMNA, Linda is entitled to a MMNA of $3,023.00 to maintain her lifestyle. Considering that Linda’s current income is $1,800, she is entitled to an income shift from Larry of $1,223.00. Finally, this income reduces Larry’s monthly Medicaid co-pay to the nursing home.