An ALJ may increase the community spouse income allocation (CSIA) if the community spouse does not have enough income to pay his or her “necessary and basic maintenance needs.” In this case, the petitioner’s community spouse had expenses including a mortgage, income and payroll taxes, and travel expenses to visit her spouse. ALJ Nancy Gagnon concluded these expenses were necessary and basic and ordered the income allocation increased for 53 months to allow for paying off the existing debt. She also found a few expenses not necessary and basic: eating out / entertainment, a newspaper subscription, and a second phone.
This decision was published with support from the Elder Law & Special Needs Section of the State Bar of Wisconsin, the Wisconsin chapter of the National Academy of Elder Law Attorneys, and Krause Financial. Thanks also to Attorney Andy Falkowski, who donated this decision from his file.
Preliminary Recitals
Pursuant to a petition filed February 29, 2012, under Wis. Stat. § 49.45(5), and Wis. Admin. Code § HA 3.03, to review a decision by the Marathon County Department of Social Services in regard to Medical Assistance (MA), a hearing was held on April 3, 2012, at Wausau, Wisconsin.
The issue for determination is whether all or a portion of the petitioner’s income should be “allocated” (disregarded) under spousal impoverishment provisions.
There appeared at that time and place the following persons:
PARTIES IN INTEREST:
Petitioner:
—
Respondent:
Department of Health Services
1 West Wilson Street, Room 651
Madison, Wisconsin 53703
By: Sherri Seubert, ES Lead Worker
Marathon County Department of Social Services
400 E. Thomas Street
Wausau, WI 54403
ADMINISTRATIVE LAW JUDGE:
Nancy J. Gagnon (telephonically)
Division of Hearings and Appeals
Findings of Fact
- Petitioner (CARES # —) is a resident of Marathon County.
- The petitioner lives in a nursing home. He filed an application for Institutional /Long Term Care MA on February 16, 2012. On February 28, 2012, the county agency issued written notice to the petitioner advising that he would have to contribute $1,252.10 toward his nursing home care expense (the balance is paid for by MA) from February, 2012 onward. After the spouse’s income dropped under $2,841 monthly, the patient liability contribution was declared to be $1,075.50 monthly from May 1, 2011, forward. The February 28 notice also advises the petitioner that only the $45 personal allowance and his $291.40 health insurance premium cost would be subtracted from his income in this nursing home liability computation.
- The petitioner has a spouse, — residing in the community. At application, she had an average gross monthly income of $3,399.95 ($2,237.95 earned income plus $1,162 Social Security). The Maximum Community Spouse Income Allocation is $2,841. Because the spouse’s gross income was over the $2,841 maximum allocation amount, the Department automatically determined that none of the institutionalized spouse’s income would be allocated to her through April, 2012.
- The petitioner has gross monthly income of $1,511.00. After subtraction of the $45 statutory personal allowance, the $213.90 health insurance premium, and the zero Community Spouse Income Allocation, the Department determined that the petitioner had $1,252.10 (from February – April) available to contribute toward the cost of his nursing home care. From May 1 onward, $176.60 is being allocated to his spouse.
- — has identified living expenses at hearing that total $5,240.
- Of the monthly expenses referred to in Finding #5. $5,046 are reasonable, basic and necessary living expenses. The petitioner has atypical expenses for the spouse of a nursing home resident in that (1) she still has mortgages. (2) she is employed, and therefore pays income taxes, and (3) she expends gas to go to work and visit her husband at the nursing home, which is five miles away.
Discussion
Spousal impoverishment is an MA policy, created pursuant to the Medicare Catastrophic Coverage Act of 1988, which allows persons to retain assets and income that are above the regular MA financial limits. Spousal impoverishment policy applies only to institutionalized persons and their community spouses.
After an institutionalized person is found eligible, s/he may allocate some of her income to the community spouse if the community spouse’s gross monthly income does not exceed the Maximum Community Spouse Income Allocation of $2,841.00. See MA Eligibility Handbook (MEH), 18.6.2. available online at http://www.emhandbooks.wisconsin.gov/meh-ebd/meh.htm. In this case, the gross income of the community spouse is over $3,300. The Department therefore initially allocated zero from the institutionalized spouse’s net income to her as the community spouse.
The community spouse argues that she cannot get by without a larger allocation. The county agency does not have discretion to allocate income to her that would cause her “income plus allocation” total to exceed $2,841. However, I have some limited discretion and have determined that — income is short of what she needs to cover basic living expenses. The statute allows the allocation to be raised to avert financial duress, created by exceptional circumstances, for the community spouse. I conclude that the Maximum Allocation must be raised to $5,046 for 53 months, followed by $3,916 thereafter, to avert financial duress. Exceptional circumstances are present here: the spouse (1) has mortgage payments, (2) is employed and pays income taxes, and (3) has costs incurred in visiting her husband. See s.49.455(8)(c). Wis. Stats. The acceptable monthly expenses verified by the community spouse are as follows:
| Mortgages | 1391.00 |
| Property taxes | 237.00 |
| Gas/electricity/water | 275.00 |
| Water softener expense | 84.00 |
| Telephone/internet | 133.00 |
| Federal income tax | 167.00 |
| State income tax | 111.00 |
| SocSec/Medicare taxes | 137.00 |
| Car payment | 469.00 |
| Car/home insurance | 101.00 |
| Gas (car) | 150.00 |
| Vehicle maintenance | 40.00 |
| Groceries | 200.00 |
| Home maintenance | 75.00 |
| Charge card debts ($37,165 balance) | 1130.00 (min. balances) |
| Dentist debt (from husband, $808 balance) | 67.00 |
| Wife’s supplemental health insurance | 129.00 |
| Wife’s Part D insurance | 15.00 |
| Wife’s dental insurance | 32.00 |
| Wife’s vision insurance | 21.00 |
| Haircare | 22.00 |
| Clothes/toiletries | 60.00 |
| TOTAL | $5046 |
In setting the Maximum Allocation at $5,046. I accepted as accurate the budget numbers provided by the community spouse in her exhibits. The county agency may leave this $5,046 Maximum Allocation in place for 53 months, and then insert a $3,916 Allocation indefinitely (or the Maximum Allocation established in the Handbook at the time, if higher) unless the petitioner’s spouse’s circumstances change significantly. The higher amount is to allow the petitioner to pay off the charge card debt. I was not able to accelerate the debt repayment (as there is no benefit to either the petitioner or the Department in having her accumulate exorbitant credit card interest charges over a long period of time) due to insufficient income stream for this household.
Some of the expenses identified by the community spouse were not included in setting the Maximum Allocation. The excluded monthly expenses were eating out/entertainment, a newspaper subscription (the petitioner has internet service) and a second (cell) phone. Although I believe that the spouse does spend these amounts, I do not conclude that they are basic living expenses. Thus, they were not included.
Conclusions of Law
- Due to exceptional circumstances, the petitioner’s spouse requires $5,046 to live on from February 1, 2012 through June 30, 2016.
- Due to exceptional circumstances, the petitioner’s spouse requires $3,916 to live on from the 54th month of patient liability onward.
THEREFORE, it is
Ordered
That the petition for review herein be remanded to the county agency with instructions to increase the petitioner’s Maximum Community Spouse Income Allocation to $5,046 effective with the February, 2012, cost of care liability determination. The Maximum Allocation will be adjusted to $3,916 effective with the July, 2016, cost of care liability determination. This action shall be taken within 10 days of the date of this Decision. In all other respects, the petition is dismissed
[Request for a rehearing and appeal to court instructions omitted.]
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