Major Medicaid IRA Update by William J. Stockdale

Medicaid is a needs-based public benefits program which provides medical insurance primarily to the impoverished, elderly, and disabled. However, on July 26, 2024, Medicaid made a major change with how it treats retirement funds.

In 1988, Congress created Spousal Impoverishment Rules, a set of rules designed to prevent a healthy spouse living at home from becoming financially impoverished due to an institutionalized spouse’s cost of nursing home care. These rules set a baseline list of resources which are considered countable or non-countable resources for Medicaid purposes. States are authorized to add non-countable resources to the list if they choose.

Prior to July 26, Indiana did not consider the IRA of a Community Spouse a countable resource subject to being “spent down” to pay for an ill spouse’s care. Unfortunately, Indiana has decided to change that policy, and now considers the IRAs of each spouse an available resource to spend on an ill spouse’s long-term care.

For more information, or to see how this may impact you or your family, consider reaching out to a qualified elder law attorney today.