An ALJ can increase the Community Spouse Resource Allowance (CSRA) if the additional resources are needed to generate income for the community spouse up to the Minimum Monthly Maintenance Needs Allowance (MMMNA). In this case, the petitioner and her spouse had an asset limit of $52,000, countable resources “in the range of $60,000 to $75,000,” and a combined monthly income of just $2,060. ALJ John Tedesco concluded, based on Wis. Stat. § 49.455(8)(d), that the CSRA should be increased to compensate for low income, that actually purchasing an annuity to generate that income was not required, and that the application must be retroactively approved.
This decision was published with support from the Wisconsin chapter of the National Academy of Elder Law Attorneys and Krause Financial.
Preliminary Recitals
Pursuant to a petition filed on May 8, 2025, under Wis. Stat. § 49.45(5), and Wis. Admin. Code § HA 3.03(1), to review a decision by the Dane Cty. Dept. of Human Services regarding Medical Assistance (MA), a hearing was held on June 25, 2025, by telephone.
The issue for determination is whether the agency should increase the spousal asset allowance.
There appeared at that time the following persons:
PARTIES IN INTEREST:
Petitioner:
—
Petitioner’s Representative:
Attorney Mark Johnson
Johnson Teigen Attorneys at Law
2924 Marketplace Dr
Suite 102
Fitchburg, WI 53719
Respondent:
Department of Health Services
1 West Wilson Street, Room 651
Madison, WI 53703
By: Dane Cty. Dept. of Human Services
1819 Aberg Avenue
Suite D
Madison, WI 53704-6343
ADMINISTRATIVE LAW JUDGE:
John Tedesco
Division of Hearings and Appeals
Findings of Fact
- Petitioner (CARES # —) is a resident of Dane County.
- Petitioner applied for institutional MA on 3/6/25.
- The petitioner owned assets that put her over the asset limit for MA.
- The petitioner and her community spouse have monthly income near $2,060 per month which is solely social security payments to each spouse.
- The agency determined an asset limit of $52,000.
- The couple has assets in the range of $60,000 to $75,000.
- Petitioner was found ineligible for MA based on assets.
Discussion
The federal Medicaid Catastrophic Coverage Act of 1988 (MCAA) included extensive changes in state Medicaid (MA) eligibility determinations related to spousal impoverishment. In such cases an “institutionalized spouse” resides in a nursing home or in the community pursuant to MA Waiver eligibility, and that person has a “community spouse” who is not institutionalized or eligible for MA Waiver services. Wis. Stat., §49.455(1).
When initially determining whether an institutionalized spouse is eligible for MA, county agencies are required to review the combined assets of the institutionalized spouse and the community spouse. MA Handbook, Appendix 18.4.1. All available assets owned by the couple are to be considered. Homestead property, one vehicle, and anything set aside for burial are exempt from the determination. The couple’s total non-exempt assets then are compared to an “asset allowance” to determine eligibility.
The asset allowance for this couple was $154,140. MA Handbook, App. 18.4.3, which is based upon Wis. Stat., §49.455(6)(b). $2,000 (the MA asset limit for the institutionalized individual) is then added to the asset allowance to determine the asset limit under spousal impoverishment policy. If the couple’s assets are at or below the determined asset limit, the institutionalized spouse is eligible for MA. If the assets exceed the above amount, as a general rule the spouse is not MA eligible.
The MCAA established a “minimum monthly needs allowance” for the community spouse at a specified percentage of the federal poverty line. This amount is the amount of income considered necessary to maintain the community spouse in the community.
As an exception to this general asset limit, assets above the allowance may be retained as determined through the fair hearing process, if income-producing assets exceeding the asset limit are necessary to raise the community spouse’s monthly income to the minimum monthly needs allowance. The minimum monthly maintenance needs allowance is $3,406.66. See Handbook, App. 18.6.2.
Wis. Stat., §49.455(6)(b)3 explains this process, and subsection (8)(d) provides as follows:
If either spouse establishes at a fair hearing that the community spouse resource allowance determined under sub. (6)(b) without a fair hearing does not generate enough income to raise the community spouse’s income to the minimum monthly maintenance needs allowance under sub. (4)(c), the department shall establish an amount to be used under sub. (6)(b)3 that results in a community spouse resource allowance that generates enough income to raise the community spouse’s income to the minimum monthly maintenance needs allowance under sub. (4)(c).
Based upon the above, a hearing examiner can override the mandated asset allowance by determining assets in excess of the allowance are necessary to generate income up to the minimum monthly maintenance needs allowance for the community spouse. Therefore, the above provision has been interpreted to grant a hearing examiner the authority to determine an applicant eligible for MA even if a spousal impoverishment application was initially denied based upon the fact the combined assets of the couple exceeded the spousal impoverishment asset limit.
But, in this case, it is not the request of the petitioner to increase the asset allowance in order to generate income for the community spouse based on an income-producing asset or assets. Instead the petitioner asks for an increase in the asset allowance “in lieu of income” (see petitioner request for hearing dated 5/7/25 and letter brief dated 6/20/25). Petitioner based this request on Wis. Stat. Sections 49.455(6)(b)3 and 8(d). Petitioner asserts that Section 8(d)2 allows an ALJ to establish an asset allowance “so that countable assets equal the purchase amount of a single premium lifetime annuity” (see letter brief dated 6/20/25 at p.1). To support his petitioner cites Section 49.455(8)(d)2:
1. If either spouse establishes at a fair hearing that the community spouse resource allowance determined under sub. (6)(b)1. to 2. or 4. without a fair hearing does not generate enough income to raise the community spouse’s income to the minimum monthly maintenance needs allowance under sub. (4)(c), the department shall establish, under subd. 2., an amount to be used under sub. (6)(b)3. that results in a community spouse resource allowance that generates enough income to raise the community spouse’s income to the minimum monthly maintenance needs allowance under sub. (4)(c).
49.455(8)(d)2.2. The department shall base the amount to be used under sub. (6)(b)3. on the cost of a single premium lifetime annuity that pays monthly amounts that, combined with other available income, raises the community spouse’s income to the minimum monthly maintenance needs allowance. Any resource, regardless of whether the resource generates income, may be transferred in an amount that, combined with the community spouse resource allowance calculated before the fair hearing, provides the community spouse with sufficient funds to purchase the annuity. The community spouse is not required to purchase an annuity to obtain this amount.
Wis. Stat. 49.455(8)(d) (boldface added for emphasis).
On the record at hearing, including the lack of objection or argument from the county agency, I find petitioner’s argument persuasive. Given the language of subsection 2, it seems that there is no requirement that an asset be income-generating, or that community spouse actually use the asset to produce income. I can’t say that I have ever had this issue presented in this manner, but, that reallocation appears to be permissible given the very low total monthly income of the couple.
The minimum monthly maintenance level is $3,406.66. Total income was $2,060. That amount is less than the minimum monthly maintenance level of $3,406.66. The single premium annuity needed to produce the additional monthly income of $821 is an investment of around $74,000. This still falls well below the minimum monthly maintenance level. The couple’s assets are less than this investment amount. Thus the entirety of assets may be transferred to the community spouse.
On the record made at hearing, including no objection from the agency, the petitioner’s Medicaid eligibility may be backdated to March 6, 2025 which was the initial date of application.
Conclusions of Law
The petitioner’s community spouse’s needs require a reallocation of all assets to the community spouse.
THEREFORE, it is
Ordered
That the matter be remanded to the county with instructions to increase the community spouse asset allowance to $75,000 retroactive to March 6, 2025, and to re-determine petitioner’s institutional MA eligibility based upon the increased allocation. The county shall do so within 10 days of this decision.
[Request for a rehearing and appeal to court instructions omitted.]
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