CHAMPAIGN, Ill. — Spousal refusal,
an increasingly popular way for elderly couples to qualify for
Medicaid coverage to avoid nursing home costs, has been painted by
critics as an abuse of public funds.
But the opposite problem – a healthy spouse facing financial ruin
because of the high costs of nursing care for an ailing mate –
illustrates the complex economic, political and social issues
surrounding spousal refusal and Medicaid, according to an article in
the Elder Law Journal
published by the University of Illinois
College of Law.
Andrew D. Wone, an editor at the journal, noted that
"Medicaid-planning strategies that seek to mitigate the high costs
of nursing home care have grown in importance" as a growing portion
of America's elderly struggle to foot the bill for health care.
One of those strategies is spousal refusal under which a healthy
husband or wife refuses to financially support a spouse in order to
quality for Medicaid, the federal program that pays medical costs
for low-income people.
Medicaid pays for nursing homes and other long-term care with fewer
restrictions than Medicare, the federal program for seniors financed
mostly by Social Security funds.
Spousal refusal has been allowed since 1988, when Congress passed
the Medicare Catastrophic Coverage Act to "protect spouses from
'pauperization' while preventing financially secure couples from
obtaining Medicaid assistance."
Although Congress required states
to recover Medicaid funds from spouses able to pay for their mate's
care – or from estates that had excess funds following the mate's
death – few states have implemented aggressive recovery programs,
according to Wone.
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This had led to several widely
publicized cases of wealthy couples filing for Medicaid under
spousal refusal and the general perception that the strategy is a
legal dodge that drains public funds away from the truly needy.
The issue is more complicated, according to the Illinois scholar,
because the vast majority of elderly who do file for Medicaid under
spousal refusal do so as a last resort. Proposals to eliminate
spousal refusal altogether would hurt seniors of modest means who
may be forced to sell their family home – or even divorce their
institutionalized mates – to stay financially afloat.
The author proposes a modified form of spousal refusal in which
spouses are required to contribute some portion of income to cover
nursing home costs. Guidelines could establish mandatory
contributions based on a couple's combined wealth and limit the use
of spousal refusal "to situations where there is a substantial,
documented need based on a case-by-case analysis," Wone wrote.
"States would be free to determine the specific contribution
percentage, which would be on a sliding scale based on countable
resources and income. The (healthy) spouse would retain the
remainder of the assets and not be subject to estate recovery until
after death, when a state's standard Medicaid estate recovery
procedures would apply."
Such a system could establish baseline standards across the nation
and help control costs to taxpayers.
His article is titled, "Don't Want to Pay for Your Institutionalized
Spouse? The Role of Spousal Refusal and Medicaid in Funding
[Text copied from
University of Illinois news release]