South Dakota resident Howard Johnson requested a hearing before an administrative law judge after he entered a nursing home and was rejected for Medicaid. Johnson had applied to have Medicaid cover the costs of his care but was rejected because he had too many assets which included the assets of his estranged wife.
Johnson sought a ruling that it was improper to count his estranged wife's assets because he had no access to them. The judge disagreed and ruled that an estranged spouse's assets can be used for purposes of determining eligibility for Medicaid. Johnson appealed that decision to federal district court.
The federal court determined that Johnson would not have been eligible for Medicaid based on his assets alone, and thus the court could not decide whether counting the estranged wife's assets was proper as the issue was moot.
The Wills, Trusts & Estates Prof Blog discussed this case in "New Case Concerning Inclusion of Estranged Spouse's Assets."
Legally the court probably made the right decision in not resolving the issue of including the assets of an estranged spouse. Federal courts only have jurisdiction to decide actual cases and controversies. They cannot make legal rulings in the absence of one.
On the other hand, the decision does leave a potentially important issue in other cases unresolved. Future Medicaid applicants with estranged spouses will not know whether or not the estranged spouses' assets will be counted against them.
An elder law attorney could help guide you through the Medicaid process and the possibility of your eligibility.
Reference: Wills, Trusts & Estates Prof Blog (April 26, 2016) "New Case Concerning Inclusion of Estranged Spouse's Assets."