Section Review

Overview of the CSRA and MMMNA Determinations

Peter E. Bernardin is an attorney with The Plunkett Law Firm, P.C. in Salem, where he focuses on estate planning and elder law.

Medicaid is a needs-based program. It is designed to provide medical care only for those individuals whose resources fall below certain thresholds. The focus of this article is the manner in which current law attempts to define these resource thresholds in order to provide coverage for an eligible applicant, while at the same time ensuring that the applicant's spouse can remain economically viable in the community.

In Massachusetts, the relevant thresholds are based primarily on the countable assets owned by the applicant and applicant's spouse (sometimes called the "community spouse"). The income received by the applicant and the community spouse will not, as a practical matter, impact eligibility, although the level of income will have a direct impact on the level of benefits received. There is a retained-income limit of $60 per month for the applicant (which is equal to the "personal needs allowance"). The applicant's income in excess of the personal-needs allowance must be applied toward the cost of nursing home care as the "patient paid amount." There are, however, deductions from or adjustments to the applicant's income for, among other things, certain guardianship costs, allowances for support of the community spouse and certain other allowable dependent and health-care expenses.

A person applying for Medicaid benefits in Massachusetts (MassHealth) is entitled to keep only $2,000 in countable assets. This is the resource "threshold" for the applicant - and it is important to note that the value of the applicant's assets cannot exceed the threshold amount (as it may be adjusted from time to time by MassHealth) at any time. If, after the applicant is found to be eligible, the applicant acquires additional assets or the assets owned by the applicant appreciate in value so the applicant's countable assets exceed the then relevant threshold, the applicant will be disqualified. The applicant must either perform additional planning or spend down the surplus.

For many purposes in law, a husband and wife are viewed as one economic unit. Although at one time there was a requirement that both the applicant and the community spouse spend down the marital assets before the applicant would be eligible for Medicaid, Congress realized that this spend-down resulted in the impoverishment of the community spouse. The Community Spouse Resource Allowance (CSRA) was devised to allow the community spouse to retain the assets necessary to avoid impoverishment. Please note that the CSRA should not be viewed as a maximum; as will be more fully developed below it is possible to increase the CSRA through an administrative process within the MassHealth system. Particularly in the current low-interest environment, this administrative process offers a potentially attractive alternative to the ubiquitous "half-a-loaf" method.

In addition, the Minimum Monthly Maintenance Needs Allowance (MMMNA) allows the community spouse to receive a portion of the institutionalized spouse's income if the community spouse's income falls below certain thresholds. This is known as the Community Spouse Monthly Income Allowance. Alternatively, the community spouse may seek to increase their CSRA as a means of producing additional income to cover the deficiency. The MMMNA, as its name implies, is a minimum rather than a maximum.

The Community Spouse Resource Allowance

An informal definition of the CSRA is that amount of countable assets the community spouse may keep without impacting the Medicaid eligibility of the applicant spouse. Assets are treated the same (i.e., as "countable" or "non-countable") for purposes of determining the CSRA as they are treated for purposes of determining Medicaid eligibility.

MassHealth evaluates the assets of the applicant and community spouse (the "snapshot") as of the date of institutionalization. However, MassHealth eligibility is determined as of the date an application is filed (it should be noted that an applicant may request MassHealth to provide Medicaid benefits for up to three months before the date of the application). The applicant will not be able to appeal MassHealth's assessment of the CSRA until a final Medicaid application is submitted and denied.

The base CSRA under MassHealth is set forth in the regulations and currently is one-half of the combined total countable assets of the applicant and the community spouse not to exceed $90,660. If, however, the combined countable assets of the couple are $36,132 or less, they can keep the greater of $18,132 or all of their assets. 130 CMR 520.016. This amount is in addition to the $2,000 to which the applicant is entitled. It is also in addition to the non-countable assets that either spouse may keep.

The community spouse is allowed to keep his or her own monthly income from whatever the source (pensions, annuities, etc). The community spouse also is allowed to keep the income produced by the CSRA assets. One planning strategy, therefore, is to re-title assets into the name of the community spouse, thereby shifting the income produced by those assets from the applicant to the community spouse. The income produced by the CSRA assets, along with the income from most other sources, is counted toward the community spouse's MMMNA.

For purposes of determining the CSRA, it does not matter in whose name (applicant or community spouse) the assets are titled. However, assets titled in the applicant's name must be transferred to the community spouse or re-titled into the community spouse's name within 90 days of MassHealth determining Medicaid eligibility and the CSRA. These transfers are not subject to the normal transfer restrictions.

It is possible to request an increase in the CSRA when the community spouse's income is less than the community spouse's MMMNA. The community spouse is entitled to keep additional assets to, in theory, produce additional income and thereby increase the income of the community spouse up to their MMMNA. There is no requirement that the community spouse actually use the additional assets to produce income.

The personnel in the intake department of MassHealth are not entitled to increase the CSRA. As a consequence, the community spouse looking to increase the CSRA must submit the application knowing that it will be denied for excess assets. This is discussed in further detail below.

The Minimum Monthly Maintenance Needs Allowance

As mentioned above, the community spouse is entitled to keep all of the income produced by the CSRA assets as well as their income from all other sources. To the extent that the community spouse's income falls below the threshold that has been established as the minimum necessary to live in the community (the MMMNA), there are two options for "making-up" the difference.

Option One - Income First. The community spouse can simply elect to receive some or all of the income from the institutionalized spouse's pension, Social Security or other income sources up to the MMMNA. Essentially, the community spouse is placed in line before MassHealth in order of priority for receiving this income.

In 1994, Massachusetts moved away from this "income first" rule. G.L. c 118 ß21A. Nevertheless, the default rule is that the community spouse will receive the income from the applicant up to the MMMNA unless the community spouse elects to increase the CSRA pursuant to option two.

Option Two - Increase the CSRA. The community spouse can seek to increase the base CSRA to include assets sufficient to produce the additional income needed to raise the total income of the community spouse to the MMMNA (or possibly beyond, if necessary to meet specific needs of the community spouse). In order to elect this option, the applicant must file the MassHealth application while there are still excess assets. This means that the applicant must file the application with the knowledge that they are technically not eligible and that the application will be denied. When MassHealth denies the application, the applicant must appeal by requesting a fair hearing with the MassHealth Board of Hearings. As mentioned, the individuals in the intake department at MassHealth do not have the authority to approve an increase in the CSRA. The intake department is required to determine that the applicant is not eligible for Medicaid coverage and provide information about the right to request a fair hearing.

At the fair hearing, the community spouse will request an increase in their asset allowance (CSRA) by an amount that will create enough income (using an imputed rate of return) to increase total spousal income to the MMMNA. To the extent these additional assets would not produce income sufficient to bring the community spouse's total income up to the MMMNA, the community spouse may then look to the institutionalized spouse's income for the remaining shortfall. MassHealth should calculate both the CSRA and the MMMNA when it reviews the MassHealth application.

Calculating income of the community spouse and the MMMNA

The MMMNA differs for each individual, though there is a floor (currently $1,493) and ceiling (currently $2,267). If the community spouse's income exceeds the ceiling, there is no need to proceed with the MMMNA calculations because the community spouse is not going to be entitled to receive income from their spouse or an increase in the CSRA unless there are exceptional circumstances, discussed below. As a result, the logical first step in the MMMNA analysis is to calculate the community spouse's income. If the community spouse's income is in excess of the allowable MMMNA ceiling, there is no need to analyze further. If the community spouse's income is less than the allowable MMMNA ceiling, however, the second step is to calculate the specific MMMNA for the community spouse and compare this number to the community spouse's income to find out if the spouse is entitled to an income allowance. The last step is to determine by how much the CSRA should be increased based on the rates of return imputed by MassHealth. Each of these steps is discussed below.

A. Calculating the income of the community spouse

For purposes of MassHealth, the community spouse's income is comprised of actual income (earned and unearned) and income imputed to the countable assets owned by the community spouse based on a certain benchmark interest rate. To calculate the community spouse's income, you need to review the regulations set forth at 130 CMR 520.04 & 130 CMR 520.017. These regulations basically include all income with limited exceptions. It is important to note that MassHealth imputes the income attributable to the spouse's countable assets rather than looking to past performance.

Income is imputed to CSRA assets based on the Bank Rate Monitor Index for money market accounts at the date of the hearing. Because the interest rate used to impute income will be unknown until the date of the hearing, a person appealing MassHealth's CSRA determination must gamble on which direction this rate will head, as explained more below. The Bank Rate Monitor Index is posted in the Boston Globe and online at

The income imputed to the CSRA assets and excess assets will decrease as the rate of return decreases. These rates of return for money market accounts and CDs tend to track current interest rates. Because more assets are needed to makeup a shortfall in the MMMNA when the rate of return is lower, applicants benefit from the lower interest rates. The community spouse can keep more assets in order to create the income needed to make up the MMMNA shortfall. The CSRA assets do not need to be invested in money market accounts, CDs or any other particular investment.

B. Calculating the MMMNA

The MMMNA is calculated by starting with the floor or base allowance (currently $1,045). The base allowance is the same for all applicants, and includes an amount for the community spouse's living arrangements (known as the "shelter expense"). The shelter expense is deemed to be 30 percent of the base allowance (currently $448). To the extent that the community spouse's living arrangements exceed the shelter expense, an adjustment is allowed to the base allowance. The adjustment to the base allowance (known as the "excess shelter allowance") is calculated by comparing the standard shelter expense to the actual "shelter expenses" of the community spouse. To the extent that the community spouse's actual shelter expenses exceed the standard shelter expense, the community spouse will be entitled to an excess shelter allowance. The excess shelter allowance plus base allowance equal the MMMNA.

C. Calculating the Community Spouse Monthly Income Allowance

Once the MMMNA is calculated, the deficiency (if any) can be determined by subtracting the community spouse's actual income from the MMMNA. The difference represents the amount of additional income to which the community spouse is entitled (the Community Spouse Monthly Income Allowance). This shortfall in income can be covered either from the institutionalized spouse's income or by increasing the amount of assets the community spouse may keep in the form of the CSRA.

The CSRA will only be increased to the extent additional assets are needed to provide income for the Community Spouse Monthly Income Allowance. Income is imputed to all assets in excess of the CSRA assets based on the rate for 21

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