Is Divorce the Best Option for Older Americans?

03/16/2015 01:17 pm ET | Updated May 16, 2015

"Will you still need me? Will you still feed me? When I'm 64?"

The Beatles first released these quaint, clarinet-fueled lyrics in 1967 when the loving answer to these questions was a resounding, "Yes!" Traditional marriage vows echo this sentiment in that they presuppose a relationship span that encompasses young and old age, wellness and serious illness, wealth and poverty. However, as modern aging has come to be defined by living longer with chronic care needs, and providing long-term care has shifted to the public sector, with two thirds of long term care services paid for by Medicaid, loving spouses may be forced to answer, "No," to these questions. The future of elder care may depend on divorce.

Long-term care needs are expensive. For example, in 2014 the average annual cost of a semi-private room in a skilled nursing facility was $83,114. Seventy percent of those over 65 years of age will eventually need some level of long-term care whether provided in a home, assisted living center or nursing care facility. To pay for these services many Americans access the Medicaid Long-Term Care benefit, which can pay for the room and board or home health services of qualifying individuals over the age of 21. In order to be eligible, an individual must meet both general criteria concerning age and medical necessity and financial criteria concerning income determined by the federal poverty guidelines (in 2012, a cap of $931 a month for an individual) and assets such as checking and savings accounts, real property, stocks and bonds, but excluding an individual's primary residence, household belongings, life insurance or burial costs up to $1500, and one motor vehicle. However, all income and assets are subject to a five-year look back period when a person cannot transfer any assets below market prior to avoid being counted as an asset for eligibility. When a financial excess exists, Medicaid allows individuals to "spend down" their income and assets in order to eventually be poor enough to qualify.

Concerning married couples, Medicaid has "spousal impoverishment" rules with the asset cap of $3000 for a couple living together, and different rules entirely for when one spouse resides in an institution. The spouse living in the community can keep usually a larger portion of income, the ability to keep at least some of the community spouse's income for his or her living expenses, and Medicaid will not attempt to recoup the costs for the long-term care from the estate of the deceased recipient until the death of the community spouse.

While all of these rules enable elderly and chronically ill individuals to access much needed long-term care services, the rules also tacitly encourage divorce. The term "Medicaid Divorce" is not new and has been considered a legal option for avoiding the five-year look-back period for Medicaid eligibility as well as avoiding the estate recovery process. That said, legal experts stress that asset protection is incredibly complicated and varies by state, but the solution of divorce remains in the public conversation. For example, the rules discourage couples from living together and providing care for each other. From a financial perspective, a couple's combined assets are only protected if the Medicaid recipient does not live with his or her spouse. By divorcing, a couple could cohabitate, while protecting the income and assets of the spouse not receiving Medicaid home health benefits.

Divorcing could also protect the primary residence from the Medicaid Estate Recovery program, which essentially gives usufruct, the right to use and enjoy an asset while owned by someone else, to the surviving spouse until his or her death, upon which the state can recoup the costs of care from the estate. In this case, the next generation pays for the care of their elders by losing a potential inheritance. A divorce could keep the real property in the name of the community spouse and thus not be subject to recovery.

Aging and care are already expensive and stressful. Even the 20-something-aged Beatles in 1967 wondered if love now would translate into care in old age. An apt question for our modern times when a growth in "gray divorce" is already occurring, and as recently reported, researchers Amelia Karraker and Kenzie Latham have found that the illness of a wife can be connected to divorce. We are divorcing well enough on our own, we do not need our social safety net encouraging divorce as the only viable option for protecting a family's nest egg. We need policies that reward and support privately provided care, which is cheaper for society to boot, that explicitly honors the marriages of older Americans as well as the income and assets of the caregiving spouse. Divorce should not be the only option.

Amy Ziettlow researches family structure and elder care. Her work, co-authored with Naomi Cahn, is featured in volume 23, no.1 of The Elder Law Journal and will be presented in the book Homeward Bound, slated for publication by Oxford University Press in 2016.