Spousal Refusal
What Is Spousal Refusal—and What Does It Do?
Spousal Refusal is a Medicaid planning approach where the non-applicant (community) spouse formally refuses to contribute to the cost of the applicant spouse’s long-term care. Even though spouses generally have a legal duty to support each other, Medicaid cannot deny the applicant’s coverage solely because the community spouse declines to pay. The doctrine also allows the community spouse to retain their own assets by refusing to make them available.
This strategy may be used when one spouse seeks Nursing Home Medicaid or, in some states, Home and Community Based Services (HCBS) Waiver benefits. “Applicant,” “institutionalized,” and “community” spouse labels can apply whether care is in a facility or at home.
Although grounded in federal Medicaid principles, routine use is largely limited to a few states—most commonly Florida, New York, Ohio, and Rhode Island.
Why Can Spousal Refusal Work Under Medicaid Rules?
Medicaid eligibility has both income and asset limits (vary by state and marital status). As a general 2025 guide, a married applicant’s income limit is $2,901/month and the applicant’s asset limit is $2,000 (exceptions exist—e.g., California has no asset limit; New York uses an applicant asset cap of $32,396).
Income test: Only the applicant’s income counts toward Medicaid income eligibility; the community spouse’s income is ignored.
Asset test: Spouses’ assets are generally treated as jointly available. However, Spousal Impoverishment Rules protect the community spouse with allowances for income and resources:
- Monthly Maintenance Needs Allowance (MMNA): Typically between $2,643.75 (7/1/25–6/30/26) and $3,948 (1/1/25–12/31/25).
- Community Spouse Resource Allowance (CSRA): Usually up to $157,920 in 2025 for the community spouse, in addition to the applicant’s own allowance ($2,000 in most states; $32,396 in NY). CA’s no-asset-limit policy makes CSRA irrelevant there.
If assets still exceed limits, Spousal Refusal can protect additional resources for the community spouse because the state will calculate the applicant’s eligibility as if single—disregarding the refusing spouse’s assets. New York note: if the community spouse’s income exceeds the MMNA ($3,948/month in 2025), they would ordinarily owe 25% toward care; Spousal Refusal eliminates that contribution obligation.
How Do You File Spousal Refusal? (Step-by-Step)
Step 1 — Move Excess Assets
Transfer countable assets above the applicant’s limit into the community spouse’s name so the applicant meets the asset test. Transfers between spouses are not penalized by the 60-month Look-Back.
Step 2 — Submit a Written Refusal
The community spouse signs and files a Spousal Refusal statement with the Medicaid agency, formally declining to contribute. Eligibility is then assessed as if the applicant were single.
Step 3 — Assign the Right of Support to the State
Along with the Medicaid application, the applicant signs a form assigning the state the right to seek support. This authorizes the state to pursue reimbursement from the refusing spouse if it chooses.
When Might Spousal Refusal Be a Good Fit?
It can make sense when a couple has substantial assets and one spouse needs Medicaid-covered nursing home care. With the nationwide average nursing home cost around $9,227/month (~$111,325/year), savings can evaporate quickly. It’s also useful when the community spouse cannot live on standard allowances or—especially in New York—has very high monthly income.
What Are the Risks or Downsides?
- Potential lawsuit: A state may demand repayment from the community spouse and even sue. Responses include paying the amount, negotiating, or contesting; even repayment is often ~25–33% lower than private-pay rates due to Medicaid’s lower reimbursement.
- No spousal allowances: If you elect Spousal Refusal, the community spouse generally won’t receive the MMNA or CSRA.
Where Is Spousal Refusal Practiced?
While theoretically arguable everywhere, it is commonly practiced in only a few states. Connecticut says it disallows Spousal Refusal, but a 2005 federal court decision upheld its use; enforcement may require hiring counsel.
Spousal Refusal Availability Snapshot
| State | Practice Status | Notes |
|---|---|---|
| Florida | Commonly practiced | Often used to protect community spouse assets and income |
| New York | Commonly practiced | Eliminates 25% income contribution when MMNA exceeded |
| Ohio | Commonly practiced | Used in nursing home and some HCBS cases |
| Rhode Island | Commonly practiced | Available with proper filings |
| Connecticut | Contested/possible | State says “no,” but federal court upheld; may require litigation |
| All Other States | Limited/rare | May be asserted; practical enforcement varies |
Do You Need a Medicaid Planning Professional?
Yes—strongly recommended. A professional can confirm which assets are exempt vs. countable, estimate your CSRA and MMNA, and determine if Spousal Refusal (versus other tools) yields the best outcome. They can also manage the filings and negotiate if the state issues a repayment demand.
What Are Practical Alternatives to Spousal Refusal?
- Spend Down (within rule): Pay off debts, make home repairs or accessibility upgrades, add a room, or purchase medically necessary items (e.g., hearing aids) to convert countable assets to exempt ones.
- Irrevocable Funeral Trust (IFT): Prepay funeral/burial and reduce countable assets without violating the Look-Back.
- Medicaid-Compliant Annuity: Convert a lump sum to a monthly income stream for the community spouse.
- Medicaid Divorce: Considered for couples with significant assets where other options won’t adequately protect the community spouse.
