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Medicaid limit bites into income // $15 of man's benefits cost wife almost $400 in monthly support

Ann Murty, 83, would move mountains if she could reduce her husband'sretirement benefits by $15.

Norman Murty, 80, wouldn't miss the money. He's paralyzed by strokes and is living out his life in a nursing home. One way or another, the system will care for him.

But Mrs. Murty is not so fortunate. She remains active, with a home to maintain and bills to pay. That extra $15 could ruin her.

The Murtys, like many middle-class couples, have fallen into a widening hole in our social safety net.

Before Norman Murty became sick six months ago, the Murtys lived

comfortably by pooling their incomes. Now nursing home bills all but consume his income, leaving Ann Murty to rely solely on her own income. As with many women of her generation, financial self-reliance means poverty.

Mrs. Murty's monthly Social Security check amounts to $232. The Department of Veterans Affairs pays her another $174, a special benefit to spouses of veterans who are institutionalized.

Even though the Murtys have paid the mortgage on their modest home, housing expenses alone will swallow nearly half her income, she said.

Taxes, insurance, maintenance and utilities will see to that.

"All my life we managed the bills," she said. "We always got by.

Now it comes to the point where we can't, and it's sad."

It's no secret that nursing home expenses can devastate a healthy spouse - particularly women, who tend to have smaller incomes. What has changed in recent months is the economic status of the people who are affected most dramatically.

It's now a middle-class problem.

Since October, lower-income people in nursing homes receive considerable financial protection for their spouses under Medicaid, a federal-state assistance program.

If Murty could qualify for Medicaid, for example, Mrs. Murty could keep some of his retirement income for her own use. She would be guaranteed at

least $815 a month and might qualify for hundreds more depending on her expenses. If the couple had savings, she could keep up to $60,000.

Unfortunately for the couple, Murty does not qualify for Medicaid.

His Navy pension and Social Security check total $1,173 a month. That is $15 above Medicaid's federally mandated income cutoff of $1,158.

The effect for Mrs. Murty is like stepping off a cliff. Because her husband makes an extra $15, she loses almost $400 in monthly support.

"I don't know what I'll do," she said. "It really hurts to know that you are only $15 over the line, that help is within reach but you can't get it. If I could get it, I'd be comfortable."

She is not alone in her plight. Nursing home expenses easily run $2,000 a month. That leaves people such as the Murtys too well-off to qualify for Medicaid but too poor to provide for the healthy spouse at home.

Where the lower-income spouse receives at least $815 a month through Medicaid, the middle-income spouse can be left with less than $400. If such a couple has a mortgaged home, they can lose that home quickly.

"It's all or nothing," said David Hicks, supervisor of the state CARES program, which monitors nursing home admissions.

"You get your retired military, retired New York state employee, retired postal employees. They have their pension lined up so they don't qualify (for Medicaid). If they didn't do some good investing in their life, they are out of luck."

Many people whose incomes fall just over the Medicaid limit face a double whammy, Hicks said. Not only is the healthy spouse impoverished, but the sick spouse sometimes cannot afford the private-pay rate of even the cheapest nursing homes.

In the past, a few homes might take someone in for whatever he could pay. But that is rare now, Hicks said. "It's nearly impossible to find a place for under $1,400."

Among other things, nursing home profit margins have been sorely squeezed by cutbacks in Medicaid and Medicare payments. So homes are less likely to take on a money-losing patient.

Murty was lucky. As a veteran of World War II, he qualified for special assistance from Veterans Affairs. That supplemented his pension and Social Security. Swanholm Nursing & Rehabilitation Center agreed to give him a small discount on its normal private-pay rate.

"Thank God for the Veterans Administration. They came to our rescue," Mrs. Murty said.

That is true for him but not for her.