Understanding What Spousal Refusal Means Under Medicaid Law
- Spousal refusal is recognized under federal law. See 42 S.C. § 1396r-5(c)(3). It applies specifically in cases where there is a community spouse and an institutionalized spouse.
- This means that the spouse applying for Medicaid must be “in a medical institution or nursing facility,” and be married to someone who “is not in a medical institution or nursing facility.” 42 S.C. § 1396r-5(h)(1).
- Basically, the federal law states that New Jersey cannot deny an institutionalized spouse’s application due to their inability to obtain information about the community spouse’s assets under certain circumstances. 42 S.C. § 1396r-5(c)(3).
Medicaid is a means-tested benefits program, meaning that an applicant must meet both income and resource standards to be eligible. When an applicant is married, the assets of both spouses are counted when determining eligibility. See 42 U.S.C. § 1396r-5. This means that if the non-Medicaid spouse has considerable assets, the Medicaid applicant spouse may be ineligible for Medicaid. In such case, the non- Medicaid spouse may claim “spousal refusal.” Spousal refusal allows the spouse applying for Medicaid to become eligible for Medicaid while the non-applicant spouse seeks to protect his/her own assets.
Before asserting a spousal refusal, the applicant spouse needs to be residing (or placed) in an assisted living or nursing home facility.
The actual language of the federal law is as follows:
The institutionalized spouse shall not be ineligible by reason of resources determined under paragraph (2) to be available for the cost of care where-
(A) the institutionalized spouse has assigned to the State any rights to support from the community spouse;
(B) the institutionalized spouse lacks the ability to execute an assignment due to physical or mental impairment but the State has the right to bring a support proceeding against a community spouse without such assignment; or
(C) the State determines that denial of eligibility would work an undue hardship.
Some states allow a spousal waiver when the non-applicant spouse simply refuses to make their assets available in determining their spouse’s eligibility. However, New Jersey has generally refused to allow spousal waivers absent extreme circumstances, such as between estranged spouses with a domestic violence restraining order, or by an elderly community spouse who is unable to comply with document requests due to overwhelming stress.
Other states also make it challenging to obtain a spousal waiver. They take the position that a spousal waiver can be granted only if “the institutionalized spouse has assigned to the State all rights of support from the community spouse and denial would work an undue hardship for the institutionalized spouse.” Although this is arguably a misapplication of the federal statute, which requires the assignment of support rights or undue hardship, it remains the law in several states.
Although a spousal waiver allows an institutionalized spouse to become Medicaid eligible without consideration of the community spouse’s resources, it “does not deprive the State of all opportunity to seek recoupment from a financially qualified community spouse.” Rather, it permits Medicaid to seek reimbursement “from the community spouse after Medicaid benefits are paid.” Id. Therefore, even when a spousal waiver is successful, Medicaid has the right to take legal action against the community spouse for reimbursement of benefits they paid on the institutionalized spouse’s behalf.
To discuss your NJ Medicaid matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at fniemann@hnlawfirm.com. Please ask us about our video conferencing or telephone consultations if you are unable to come to our office.
By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold Township, Monmouth County, NJ Medicaid Attorney