You may have heard heartbreaking stories of devoted couples forced to consider divorce—not because they’ve fallen out of love, but because one spouse needs long-term care, and the other can’t afford to shoulder the overwhelming cost without losing everything. While divorce for Medicaid eligibility is sometimes portrayed as the only way out, there’s a lesser-known, strategic option that may help preserve both your marriage and your assets: spousal refusal.

What Is Spousal Refusal?

Spousal refusal is a legal tool available under federal Medicaid law that allows one spouse—the community spouse (the one not requiring institutional care)—to refuse to financially support the other spouse, who is applying for Medicaid. When properly executed, this strategy excludes the community spouse’s income and assets from the Medicaid eligibility determination.

How It Works

The federal government allows married couples to transfer assets to each other without triggering Medicaid’s five-year lookback period, through what are known as exempt transfers. This means that if one spouse becomes ill and needs nursing home care, the couple can transfer most of their assets into the name of the healthy spouse—the community spouse.

At the time of the Medicaid application, the community spouse may then file a spousal refusal declaration, legally stating that they will not provide financial support to the Medicaid applicant. As a result, Medicaid does not count the community spouse’s assets or income when determining the sick spouse’s eligibility.

Legal and Financial Implications

Spousal refusal is a strategic way to protect the couple’s financial stability, but it’s not without potential consequences. Medicaid has the right to seek reimbursement from the refusing spouse through legal action. However, several factors make this less daunting:

• Medicaid services are provided at a significantly reduced rate (often one-third the cost of private care).
• Not all states aggressively pursue reimbursement, and in many cases, such claims can be negotiated.
• There are legal tools available to defend against or reduce Medicaid liens.

Before taking action, it is crucial that community spouses do not respond directly to Medicaid demands without consulting an elder law attorney. Every case is unique, and an experienced attorney can help evaluate the best course of action and negotiate with the state if needed.

Why This Matters

Spousal refusal can be a lifeline for families struggling with long-term care decisions. It ensures that the healthy spouse is not impoverished while preserving eligibility for the one who needs care. And most importantly, it provides a dignified alternative to divorce purely for financial survival.

If you or your spouse are facing the possibility of long-term care, reach out to a qualified elder law attorney to explore whether spousal refusal is the right step for your situation.