San Antonio Express-News
October 18, 2005

Second Marriage & Medicaid

copyright 2005, Paul Premack

If you marry and your new husband needs nursing home care, there are only three ways to pay for it: out of family money, out of insurance money, or out of government/taxpayer money.

Regular health insurance policies, even the "medigap" policies for people with Medicare, do not cover long-term nursing home expenses. For that, a special long-term care (LTC) policy must be selected, the insurance company must determine the applicant is qualified (they can reject applicants whose health is already tenuous), and premiums must be paid.

Often the cost of LTC insurance makes it seem unattractive. But that must be put into context. For instance, is it more expensive to pay $500/month for a policy or to give up control and access to all your life savings? That is what some people do to qualify for Medicaid, unaware that the government rules on asset transfers are getting tighter and tighter. The government is pushing young, healthy seniors toward LTC insurance by making it harder to qualify for Medicaid.

Medicaid is the government/taxpayer program that pays about half the nation’s long-term care expenses. To qualify, an applicant must be low income (below $1,737/mo), have countable assets below $2,000, be 65 or disabled or blind, and be classified as needing intermediate level care or worse.

When an applicant is married, all of the couple’s resources are "deemed" to be available to the applicant as assets that might exceed $2,000. A prenuptial agreement does not change the deeming rule; indeed, since the deeming rule is required by federal law it takes priority over Texas marital property law.

A prenuptial agreement is a binding contract, usually including provisions relieving spouses of financially responsibility for each other. You each agree to forgo spousal contributions to your medical bills or support. Medicaid does not nullify that agreement, it just does not recognize it. Medicaid refuses to fund one spouse’s long-term care while the other spouse’s assets exist.

You are backed into a corner: you are not required to pay; Medicaid is not required to pay. Thinking about this before you marry sheds new light on the possible financial problems that can come from a later-in-life second marriage. Marriage moves Medicaid out of reach for many people. So your options are to stay single, to marry and buy LTC insurance, or to marry and expose your assets even if a prenuptial exists.

On another topic, many who were displaced by the hurricanes had no medical history records with them. The federal Center for Disease Control (CDC) recently posted a "Keep It With You" personal medical record form for emergencies. They recommend that we all print it out, fill it out, and keep it in a plastic bag in case of emergency. You should add a copy of your Medical Power of Attorney and your Directive to Physicians to the same bag so emergency workers know who is authorized to make your decision if you are seriously injured. Click here for a free copy (scroll down to "free forms").