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Husband's IRA Defeats Wife's Medicaid Eligibility for Nursing Home

The New Jersey Supreme Court has recently held, contrary to popular belief, that a husband's individual retirement account (IRA) must be included as a resource for purposes of determining his wife's Medicaid eligibility when the wife enters a nursing home while the husband remains in the community.

Although the court, in Mistrick v. Division of Medical Assistance, acknowledged the need to balance the competing goals of preventing the impoverishment of community spouses while assuring that institutionalized spouses pay the appropriate amount for nursing home expenses, the court determined that Mr. Mistrick could not shelter his IRA, worth over $100,000, from an evaluation of his wife's qualification for Medicaid benefits.

The court based its decision on the obligation of the states to meet certain federal requirements to receive Medicaid assistance from the federal government, in particular the Medicare Catastrophic Coverage Act of 1988 (MCCA). MCCA was enacted to protect married couples when one spouse enters a nursing home by ensuring that the spouse living in the community has sufficient income and resources to live independently.

The court explained that MCCA (1) provides for a sufficient but not excessive amount of income and resources for the community spouse, and (2) supersedes any other law with which it is inconsistent. Thus, the court found that resources of the couple that exceeded the $76,740 community spouse resource allowance, including the husband's IRA, must be viewed as being generally available for the institutionalized spouse.

Although courts outside of New Jersey do not have to follow the Mistrick case, they may very well do so.


December 21, 1998




Rosen, Barry F.


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