Utilizing Our Complimentary Medicaid Planning Desk Reference

Desk filled with papers, laptop, coffee, calculator

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.

The Krause Agency offers a variety of complementary resources, including our state-specific Desk References. These downloadable guides list each state’s distinct Medicaid planning figures for handy reference – but how do you fully utilize these figures? We’re here to teach you how to fully implement these figures and guide your Medicaid planning.

Note: These complimentary guides updated July 1, 2017, so download your state’s latest version, today!

Divestment Penalty Divisor

The average cost of nursing home care for one month in that state is known as the Divestment Penalty Divisor. Calculating the Divestment Penalty Divisor is done by the following process:

  • If your client made any gifts or asset transfers for less than fair market value to anyone other than their spouse during the 60 months of the Medicaid look-back period, the total value of the gift(s) is divided by the Divestment Penalty Divisor to determine the Penalty Period.

The Penalty Period is the amount of time the individual needs to wait before qualifying for Medicaid benefits.

Income Cap

An Income Cap often ties into a Miller Trust. States known as Miller Trust states place a limit on the amount of monthly income a Medicaid applicant, also known as the institutionalized spouse, can have while still qualifying for Medicaid benefits. When there is extra income that is higher than the income cap, Miller Trust states allow the individual to establish a Miller trust, aka a Qualified Income Trust to protect some of the extra income for personal use or for the community spouse’s needs.

Individual Resource Allowance

The Individual Resource Allowance is the amount of assets that a Medicaid applicant can retain and still qualify for benefits. It applies in situations where there is an individual and/or a couple. The Individual Resource Allowance allows an institutionalized spouse to still have access to funds for discretionary spending.

Monthly Personal Needs Allowance (PNA)

The Monthly Personal Needs Allowance or PNA allows a Medicaid recipient to keep a small monthly amount to pay for “extras”. “Extras” are often defined as things like personal care and clothing. The PNA is not required to be spent in its entirety prior to the end of the month, but an individual should not accumulate more than the Individual Resource Allowance since the PNA will count towards this number.

Minimum / Maximum Community Spouse Resource Allowance (CSRA)

The Minimum/Maximum Community Spouse Resource Allowance, or CSRA, creates protection for a community spouse from impoverishment and specifies how much they may retain in countable assets. These assets take both spouses into consideration through what is called a “snapshot date” which is known as the first date the institutionalized spouse is in a facility with continuous care for a minimum of 30 days. 

States with a minimum CSRA allow the community spouse to keep no more than half of the couple’s total countable assets, up to the maximum CSRA as specified by the state. Some states don’t establish a minimum CSRA and only establish a maximum CSRA, which may create a more generous allowance for the community spouse.

Minimum / Maximum Monthly Maintenance Needs Allowance (MMNA)

The Minimum/Maximum Monthly Maintenance Needs Allowance or MMNA is designed to help a community spouse who is struggling to get by due to insufficient monthly income to meet their needs. If the community spouse’s income falls below the MMNA, they are entitled to a shift in income from the institutionalized spouse, but only after the institutionalized spouse qualifies for Medicaid.

If a state has a maximum MMNA only, the income shift is simple. If a state has both a minimum and a maximum, the MMNA must include a calculation of the community spouse’s housing costs, Standard Utility Allowance, and Shelter Standard. To see the Standard Utility Allowance and Shelter Standard, we invite you to view your state-specific desk reference.

Shelter Standard

Recently, the shelter standard was one of the updated Medicaid figures. The Shelter Standard is the amount of shelter expenses the community spouse is responsible for paying for. If there is a shelter expense greater than the standard amount, and it can be proven, this can result in an increase in the MMNA amount. However, this may also require a fair hearing with your local Medicaid office, something The Krause Agency is happy to assist with. The fair hearing allows for both parties to examine evidence and reach an understanding regarding a couple’s financial situation.

Standard Utility Allowance

The standardized utility expense is established by every state and is used in place of actual utility costs 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.

Resource Allowance For a Couple

The Resource Allowance for a Couple was designed because when a married couple resides in a facility, they do not both get an Individual Resource Allowance. As an alternative, the institutionalized couple is designated a total resource allowance.