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Jun 29

What Does the Supreme Court’s Decision to Nullify DOMA Mean for Medicaid LTC Benefits?

UPDATE: The Department of Health and Human Services issued a memo on August 29, 2013 that same-sex marriages are recognized by Medicare for equal treatment in skilled nursing facilities. Based on HHS Secretary Kathleen Sibelius’ comment in that release, I believe it is only a matter of time before same-sex marriages will be recognized by Medicaid for long-term care benefits.

“HHS is working swiftly to implement the Supreme Court’s decision and maximize federal recognition of same-sex spouses in HHS programs,” said HHS Secretary Kathleen Sebelius.  “Today’s announcement is the first of many steps that we will be taking over the coming months to clarify the effects of the Supreme Court’s decision and to ensure that gay and lesbian married couples are treated equally under the law.”  Read the entire memo here.

The good news for the consumer is that it could mean that same-sex married couples will be able to enjoy the spousal asset protection instead of the second same-sex spouse having to deal with estate recovery at the death of the first same-sex spouse. Of course, the best scenario is they both own Long-Term Care Partnership policies so they can protect much more than Medicaid allows spouses to protect (maximum of $115,920 in 2013). For a review of how valuable Long-Term Care Partnership policies are, please see The Partnership for Long-Term Care.

(United States v. Windsor, June 26, 2013)

Publicity around the Supreme Court’s decision to nullify the Defense of Marriage Act on June 26, 2013 has centered around the ability to file joint tax returns and collect survivor social security benefits. My first reaction was “What about the ability to take advantage of the spousal impoverishment benefits under Medicaid?”  Unlike long-term care insurance which typically extends spouse discounts and other shared benefits to domestic partners, Medicaid strictly adheres to the marriage of man and woman when allowing the healthy spouse to retain a portion of assets at the time the other spouse applies for Medicaid to pay for LTC. This law, aka the Spousal Impoverishment Act, goes all the way back to 1988, the year I entered the long-term care insurance field. The amounts have greatly increased with cost-of-living increases each January to a minimum of $23,184 and a maximum of $115,920 in 2013. How does this really work? It depends on the state in which Medicaid is accessed.

When a married person applies for Medicaid to pay for LTC, the state looks at all of the assets of the couple whether an asset is in the name of the husband or the wife, excluding the home, one car, burial policies, and household furnishings. That means anything money can be taken out of, regardless of whether there is a loss or penalty. In some states, the healthy spouse keeps half of the assets up to a maximum of $115,920 and the rest of the assets are spent down to about $2,000, which is the amount the LTC spouse is allowed to keep. This amount also varies by state, ranging from a high of $4,150 in New York and a low of $1,000 in Missouri. When a single individual applies for Medicaid and this includes a domestic partner, all assets in that person’s name must be spent down to this low amount.  

You can see how states administer the Spousal Impoverishment Act on this website at  and the details by state are in Chapter Seven of my new book Protecting Your Family with Long-Term Care Insurance, entitled “People Who Do Not Qualify for LTC Insurance”. Some states have different minimums, etc. so the detail is important.

Before June 26, 2013, Medicaid looked at same-sex spouses as an unmarried applicant for Medicaid benefits even in the 13 states that allow same-sex marriages: California, Connecticut, Delaware, Iowa, Maine, Maryland, Massachusetts, Minnesota, New Hampshire, New York, Rhode Island, Vermont, and Washington, and the District of Columbia. The Defense of Marriage Act (DOMA), enacted in 1996, allowed states to refuse to recognize same-sex marriages performed under the laws of other states. Therefore twenty-nine states prohibit it in their constitutions and other states either prohibit same-sex marriage by statute or have no law either way.  So here’s the change: Section 3 of DOMA prevented the federal government from recognizing same-sex marriages. However, that provision was ruled unconstitutional by the U.S. Supreme Court on June 26, 2013, in United States v. Windsor. The result is that in the states that recognize same-sex marriages, federal benefits will be administered the same for same-sex and heterosexual marriages.

So the obvious question to me was, what happens when a same-sex couple is married in Maryland, for example, and moves to Tennessee and applies for Medicaid to pay for LTC, since Tennessee is one of the states that prohibit same-sex marriages by constitution?

Vanderbilt University legal analyst and constitutional law professor Suzanna Sherry answers the question this way:

“Tennessee couples will see benefits from the Windsor cas (DOMA) only to the extent that Tennessee recognizes their out-of-state marriages, which I believe is still an open question in Tennessee and will have to be litigated. If Tennessee recognizes their marriages, then they will receive all the federal benefits of other married couples: They can file joint tax returns, obtain survivor social security benefits, shop at the base PX if they’re married to a member of the military, etc.”

She went on to say that the reasoning of the Windsor case can be used to argue that any ban on same-sex marriage is unconstitutional. (“TN Gays ‘Lined Up’ to Marry”, The Tennessean, June 27, 2013)

My take on it is that when couples from a state that approves same-sex marriage move to a state that doesn’t recognize them, the new home state will continue to treat them as single individuals when they apply for Medicaid LTC benefits until the new home state lifts the ban on same-sex marriages.

The caveat here is that I’m not an attorney as all of you know, and this subject will be a moving target over the next two years. When 30% of the population in the country has legalized something and one of those states is California, pressure will continue to mount to expand the change.  A good resource to see where each states stands on this issue is this story on ABC News.

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