Connecticut has enacted legislation allowing the community spouse of a Medicaid recipient to keep the maximum community spouse protected amount allowed under federal law. The new law also provides that income derived through a reverse mortgage loan or other home equity conversion loan may not be treated as income or assets for the purpose of qualifying for benefits under the Medicaid program.

The law, which was signed by the governor on May 27, 2010, was the work of the Connecticut Chapter of the National Academy of Elder Law Attorneys (NAELA). The old law allowed a community spouse to keep one-half of a couple's combined assets or $109,560 (in 2010), whichever was less. This meant that for couples with only $50,000, the community spouse had to spend down $25,000 in order for the institutionalized spouse to be eligible for Medicaid. The new law requires that the spouse of an institutionalized person who is applying for Medicaid receive the maximum community spouse protected amount as determined by federal law. Attorney Paul T. Czepiga testified in person at the legislation committee hearing and submitted written comments as well in furtherance of this legislation.

The law also provides that reverse mortgage loan or home equity proceeds will not be counted as assets or income for the purposes of determining Medicaid eligibility as long as the funds are kept in a segregated account and the Medicaid recipient does not transfer the funds for less than fair market value. This reinstated a former Connecticut policy that had been reversed a few years ago.

Editor's Note: This is a great win for our senior citizens. This legislation will enable them to keep more of their money if one spouse ends up in a nursing home and the other spouse is still living in the community. The community spouse, instead of having to spend excess resources, can now keep a minimum of about $110,000, up from the previous minimum of about $23,000.