Separated, but Not Divorced - Implications on Medicaid

Many married couples choose to separate, whether they are simply living in different locations or have filed legal Separation Agreements in court as well. For purposes of Medicaid eligibility, the income and resources of "legally responsible relatives" relatives are taken into account when determining Medicaid eligibility. "Legally responsible relatives" include a spouse and a parent or step-parent of a child under age twenty-one. The law does not make a distinction between separated spouses or those living together, therefore, a spouse that is separated but not divorced remains a "legally responsible relative" whose income and resources are considered when determining Medicaid eligibility.

Nevertheless, if the spouse whose income or resources is too high signs "spousal refusal," the spouse applying for Medicaid is budgeted only according to his or her resources and income. The refusing spouse is entitled to a "Community Spouse Resource Allowance" of at least $74,820 to $119,220. The local department of social services may therefore NOT recover against the refusing spouse for the cost of medical care rendered to the Medicaid recipient spouse, as long as the resource allowance was not exceeded. Please keep in mind that Medicaid can pursue a recovery against a spouse whose assets were greater than the community spousal resource allowance even if the spouse was separated.

Other implications of separation include the New York spousal "Elective Share." This refers to a surviving spouse's right under New York law to up to one-third of the deceased spouse's entire estate. If the a non- Medicaid recipient spouse passes away, the Medicaid recipient spouse is entitled to one-third and may therefore lose Medicaid eligibility. Even if the surviving spouse does not claim the elective share, the mere existence of the right may render him or her ineligible. A refusal to claim the share is treated under Medicaid law as an uncompensated transfer and again may result in a period of ineligibility for Medicaid. While I by no means an encourage for all separated couples to divorce, I would like to urge all married couples to assess their situation in light of the Medicaid rules of eligibility and asset recovery. For more information and a consultation for your unique situation, call our office at 347-699-5529 and speak with a knowledgeable Elder Law attorney.