MassHealth has issued the new Minimum Monthly Maintenance Needs Allowance (MMMNA) numbers for the rest of 2021 and the first half of 2022 which increase the amount of income the spouse of a MassHealth-covered nursing home resident may keep. (I'll explain below why this is a bit of a misstatement of the rules, but I can't think of a better way to say it.)
They are a minimum of $2,177.50 and a maximum of $3,259.50 a month.
How the MMMNA Works
Here's what this means:
When a nursing home resident has been approved for MassHealth coverage, he must pay his income towards his cost of care except for a few possible deductions. These are:
- A $72.80 a month personal needs allowance (unchanged for decades)
- Anything he may be paying for health insurance
- A spousal allowance
- An allowance for dependent children living at home (unusual given the age of most nursing home residents)
The MMMNA has everything to do with the spousal allowance. The structure is designed to make sure the "community" spouse of a nursing home resident has enough to live on. For every such spouse, MassHealth calculates her MMMNA based on a complicated formula that takes into account her housing expenses including rent, a mortgage, taxes and a standard utility allowance. The new MMMNA figures set the parameters for this calculation. No matter what the formula spits out, the figure can be no lower than the minimum and no lower than the maximum.
Once the MMMNA has been calculated, the spousal allowance is determined to be the amount necessary to bring the community spouse's income up to her MMMNA. A simplified example should help explain how this works:
Let's assume that Mr. Green moves to a nursing home and spends down to MassHealth eligibility, currently $132,380 for the couple, and MassHealth calculates Mrs. Green's MMMNA to be $3,000. If Mrs. Green's own income is $2,000 a month, she'll be entitled to $1,000 of Mr. Green's income every month.
Let's further assume that Mr. Green's own income is $3,072.80 a month. Then he would have to pay $2,000 a month towards his nursing home care: $3,072.80 - $72.80 (personal needs allowance) - $1,000 (spousal allowance) = $2,000.
There are a few other things you need to know about the MMMNA:
- What if the community spouse has a high income? For instance, what if in our example Mrs. Green's income was $4,000 instead of $2,000 a month? Would she have to pay the $1,000 in excess of her MMMNA to the nursing home? No. The purpose of the calculation is to protect the low-income community spouse, not to create an obligation of a higher-income community spouse to support the nursing home spouse (other than the asset spend down which is a whole other issue).
- What if the total spousal income is insufficient to meet the MMMNA? What happens, in our example, if Mr. and Mrs. Green's total monthly income is $2,000, leaving Mrs. Green $1,000 short of her MMMNA despite being allocated all of Mr. Green's income? In short, she's out of luck. The MassHealth rules do not provide additional income to a community spouse.
- Except that she can use this gap to increase her asset allowance. The usual community spouse resource allowance (CSRA) for a community spouse is $130,380 (in 2021). The community spouse who has an MMMNA shortfall may appeal this figure if she needs to extra assets to invest to generate the missing income. Given the current low interest rates, this can produce exceptionally high CSRAs. For instance, if Mrs. Green has a monthly shortfall of $1,000 and certificates of deposit are paying 0.7% per year, she would need about $1.7 million invested to meet her income needs as calculated by MassHealth.
- What if the MMMNA is not enough to meet the community spouse's real needs? While the MMMNA formula does take into account some housing costs, it's simply a formula that doesn't work for everyone. In most cases, the community spouse is simply out of luck. However, she can appeal the calculation if she can show she needs more income due to medical needs. This can often be the case if she's living in an assisted living facility because for medical reasons she can no longer live completely on her own or if she is paying significant amounts for home health care. In those cases, it may be possible to use an increased MMMNA to leverage an increased CSRA as well.
As you can see, nothing is simple when it comes to MassHealth. The MMMNA can cut in many directions depending on the community spouse's income, guaranteeing her enough to live on or contributing to her ultimate impoverishment. It's also important to be reminded of the ability to appeal both the MMMNA and CSRA calculations. Many planners have forgotten these options as they encourage all community spouse's to purchase qualifying annuities. Annuities work in a lot of situations, but as we saw in a recent case, they can have their own drawbacks.