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The SSI regulations describe deeming as the process of considering another person’s income or resources to be your own. See 20 CFR § 416.1160 (income) and 20 CFR § 416.1202 (Resources). Prior to the time Medicaid is approved, all marital resources are deemed available to the Applicant. See 42 U.S. Code § 1396r–5(c)(2)(A). However, 42 U.S. Code § 1396r–5(c)(4) provides that deeming terminates after eligibility is established. Specifically it provides: “[d]uring the continuous period in which an institutionalized spouse is in an institution and after the month in which an institutionalized spouse is determined to be eligible for benefits under this subchapter, no resources of the community spouse shall be deemed available to the institutionalized spouse.” This means that, initially, it does not matter which spouse owns property; all of it must be taken into account when determining eligibility. After eligibility is established, the Community Spouse could win the lottery and it would not impact the Applicant’s eligibility.

The deeming rules changed as part of the Medicaid Catastrophic Coverage Act of 1988 (MCCA). Prior to that time, States could consider all assets of the  community spouse, as well as the institutionalized spouse, and all were deemed available to the institutionalized spouse. Income of the Community Spouse was also considered. The effect was that spouses were encourages to divorce rather than face impoverishment. See O. Ahmad, Medicaid Eligibility Rules for the Elderly Long-Term Care Applicant: History and Developments, 1965-1998, 20 J. Legal Medicine, 251, at 254 (1999). In response to this unintended consequence, Congress passed MCCA to solve the problem of community spouse impverishment. “The primary purpose of the MCCA was “to end th[e] pauperization [of the community spouse] by assuring that [there was]… a sufficient—but not excessive—amount of income and resources available” when the other spouse is institutionalized in a nursing home.” Ahmad, at 255. MCCA established Community Spouse income and resource protections to prevent spousal impoverishment. It also prevented certain resources from being counted toward eligibility, such as the home. “Examples of uncounted assets include the home where the community spouse actually lives, the land appertaining thereto, household goods, personal effects, and an automobile. Also included, to the extent that the total value does not exceed such amount as the Commissioner of Social Security determines to be reasonable, is the value of any burial space or any agreement for the purchase of a burial space held for the purpose of providing a place for the burial of the individual, his spouse, or any other family member, and other property that is considered important enough to the means of self-support.” Ahmed, at 256.

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