A spouse who continues to reside in the community after the other spouse has entered a long-term care facility is entitled to retain a portion of the couple's resources, known as the Community Spouse Resource Allowance ("CSRA").
The first step in calculating the amount of the CSRA is to perform a spousal resource assessment. This may be performed by the local Medicaid office. The elder law attorney who is advising the client on a spend-down plan needs to do this calculation as well. The CSRA is calculated by determining the total amount of the married applicant's countable available resources, valued as of the first day of the first month of continuous institutionalization (sometimes referred to as the snapshot date), and dividing it by two. Currently, the minimum CSRA is $21,512 and the maximum CSRA is $109,560 - varies from state to state. In other words, the CSRA is one-half of the applicant's countable resources or $21,512, whichever is greater, up to a maximum CSRA of $109,560.
After the CSRA is determined, the remaining available countable resources need to be spent-down. Once eliminated, the institutionalized spouse will qualify for Medicaid benefits. Within the majority of cases, part of the spend-down amount will be converted into non-countable resources (e.g. home improvements, prepaid funeral plan, automobile), while the remainder can be converted into a Medicaid Compliant Annuity. Usually the community spouse is the owner/annuitant/payee of the Medicaid Compliant Annuity, which is structured over the community spouse's Medicaid life expectancy. Since the implementation of the Deficit Reduction Act of 2005 ("DRA"), the primary difference between a pre-DRA plan and a post-DRA plan is that in the latter the Medicaid Compliant Annuity is generally structured with a very short period certain.
