J-1200, Spousal Impoverishment Purpose

Revision 15-3; Effective September 1, 2015

Effective September 30, 1989, Public Law 100–360 provides for the protection of income for the community spouse and certain dependent family members when the other spouse is institutionalized. Use the spousal impoverishment policies to determine Medicaid eligibility for individuals who:

  • are likely to be in an institutional setting for a continuous period, or
  • are eligible for Home and Community-Based Services and likely to need such services for at least 30 consecutive days, and
  • have a spouse living in the community.

Spousal impoverishment requires a valid existing marriage. In Texas, there are three ways to terminate a marriage:

  • Void Marriages — A determination that the marriage could not have existed because of one of the following legal impediments: the parties married within a prohibited degree of consanguinity (for example, nephew or niece), or at least one party has a previous marriage that has not been resolved. Void marriages do not require a lawsuit, and the marriage may be declared void in a collateral action (for example, contest of will). A legal marriage between parties never existed.
  • Annulments — Also called voidable marriages. Grounds for annulment include, but are not limited to, marrying under the influence of drugs/alcohol, at least one party being incapacitated or the marriage being coerced. Annulments require court action, but under common law, an annulment is retroactive to the date of marriage.
  • Divorce — Requires court action, and the marriage is dissolved effective the date of the divorce decree.

Spousal impoverishment provisions do not apply in the case of void or annulled marriages. If there is a void marriage or a court annulment of the marriage, always treat the person as an individual. In the case of a divorce, spousal impoverishment provisions apply through the end of the calendar month in which the divorce is issued.

Spousal impoverishment provisions do not apply when determining Medicare Savings Programs (MSP) eligibility for either spouse. When determining resource eligibility for MSP, consider resources in the institutionalized spouse's name even if they are protected for the community spouse.

A resource assessment is part of the spousal impoverishment process. The purpose of the resource assessment is to determine a protected resource amount, which is the portion of the total resources that is reserved for the community spouse and deducted from the couple's combined resources in determining eligibility.

An institutionalized spouse is a spouse who is either (1) likely to reside in an institutional setting (for example, a medical institution and/or nursing facility) for a continuous period of institutionalization, or (2) eligible for Home and Community-Based Services and likely to need such services for at least 30 consecutive days. For spousal impoverishment policy, when determining the first continuous period of institutionalization, a medical care facility includes any of the following:

  • Hospital, including a U.S. Department of Veterans Affairs (VA) hospital
  • Nursing facility, whether private-pay or Medicaid
  • Intermediate care facility for individuals with an intellectual disability or related conditions (ICF/IID)
  • Institution for mental diseases (IMD)
  • Rehabilitation facility

A community spouse is a spouse who is not living in a medical institution or nursing facility. An incarcerated spouse is not considered a community spouse for spousal impoverishment purposes.

The community spouse could be living in any of the following settings and still be considered a community spouse:

  • Personal care setting
  • Adult foster care setting
  • Supervised living setting
  • Residential care facility setting

However, if the community spouse is living in a personal care facility, check the bill to see if the spouse is actually living in a medical facility. If the personal care facility is billing for room and board only, the spouse meets the definition of a community spouse. If the personal care facility is billing for the services of any medical professional (such as a registered nurse [RN], licensed vocational nurse [LVN], doctor, etc.), the spouse does not meet the definition of a community spouse and spousal impoverishment polices do not apply.

See Section J-1500, Change in Martial Status.