Fed Releases Important Figures for 2021 Long-term Care Planning

The Center for Medicare and Medicaid Services (CMS) has announced changes to the Long-term Care Spousal Standards that apply to married couples who seek Medicaid assistance for payment of ones long-term care services. The standards that will change in 2021 include, but are not limited to, the Maximum and Minimum Spousal Resource Standards and the Maximum and Minimum Monthly Maintenance Needs Allowance (MMNA).

The Protected Resource Allowance (PRA) is the amount of assets that the community spouse is allowed to retain when the institutionalized spouse is eligible for Medicaid. A community spouse is a person who is not an inpatient in a medical institution or a nursing facility, but is married to a person who is an inpatient in a medical institution or a nursing facility or receiving personal care services in the home (the institutionalized spouse). The PRA is the greatest of either 1 – the Spousal Share (one-half of the total amount of all countable assets as of the first day of continuous institutionalization for the institutionalized spouse); 2 – the Maximum Spousal Resource Standard at the time of application; 3 – the amount actually transferred to the community spouse as court-ordered spousal support, or 4 – an amount determined at a hearing by the Department of Medical Assistance Services (DMAS). The PRA can be no more than the Maximum Spousal Resource Standard and no less than the Minimum Spousal Resource Standard. The Maximum and Minimum Spousal Resource Standards increase each year based on changes in the Consumer Price Index. On January 1, 2021, the Maximum Spousal Resource Standard will be $130,380 (the maximum for 2020 was $128,640) and the Minimum Spousal Resource Standard will be $26,076 (the minimum for 2020 was $25,728).

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Once an individual is approved for Medicaid payment of his or her long-term care services, he or she is responsible for paying a portion of his or her income to the provider, known as the patient pay. This is the amount of income that must be paid to the provider each month for the cost of long-term care services received. Medicaid allows certain deductions from the patient pay each month to allow an individual to keep a portion of his or her income to pay for things like health insurance premiums. Additionally, when a Medicaid recipient has a community spouse, an allowance can be calculated to determine the appropriate amount of funds allotted to the community spouse from the institutionalized spouse’s income to help prevent the community spouse from being further impoverished. While there are certain requirements that must be met to obtain this allowance, there is a minimum allowance amount and a maximum allowance amount. In 2021, the minimum MMNA will remain $2,155 per month, with a likely increase in July 2021. However, effective January 1, 2021, the maximum MMNA will increase to $3,259.50 from $3,216.

Additionally, CMS has announced that Medicare Part A costs and Part B premiums will increase for 2021.

Medicare Part A pays for inpatient hospital care, some skilled nursing facility care, and home healthcare. The Medicare Part A deductible amount for a benefit period will rise from $1,408 to $1,484 in 2021. Medicare Part A co-payments will increase from $352 to $371 per day for days 61 through 90, and from $704 to $742 per day for days 91 through 150 (lifetime reserve days) per benefit period. Co-payments for skilled nursing facilities will increase from $176 to $185.50 for days 21 through the 100 per benefit period. If you have a Medicare Part B Supplemental Insurance Plan, your plan may cover the cost of your daily co-payment for days 21 through 100 while you receive care in a skilled nursing facility, so long as you meet the plans requirements for ongoing assistance.

Medicare Part B covers physician services, outpatient hospital services, certain home health services, durable medical equipment, and certain other medical and health services not covered by Part A. The standard monthly premium for Part B will rise from $144.60 to $148.50 in 2021. It is important to note that Medicare Part B premiums are based on the beneficiary’s income and are adjusted according to how the beneficiary files his or her income tax returns. For more information about Medicare Part A and Part B premiums, co-pays, deductibles, and/or co-insurance amounts, you can visit www.cms.gov or www.medicare.gov.

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