As the Senate prepared to approve the "catastrophic" health insurance bill for the elderly, Sen. Barbara Mikulski (D-Md.) won approval of an amendment to address a tragic circumstance facing thousands of couples each year -- the impoverishment of a spouse when the husband or wife must go into a nursing home.

"This amendment says that when one spouse must have long-term nursing care, the other spouse doesn't have to become bankrupt before Medicaid will help out," Mikulski said.

Under the amendment, the spouse remaining at home would be allowed to keep at least $12,000 in assets and $750 a month in income from the couple's total assets and income (plus their home and a moderate-price car), without those amounts being counted against whether the person in the nursing home is poor enough to qualify for Medicaid help in paying the bills. Medicaid is a federal-state program that provides health care for the poor.

"The community spouse whose own income was less than $750 a month would be entitled to an allowance from her partner's income to bring her up to that minimum," Mikulski added.

The amendment, approved Oct. 27, is designed to address situations in which most of a couple's income and assets are in joint accounts or in the name of the partner who is entering the nursing home. This situation is common where the husband has worked all his life and is the legal recipient of most of the couple's pension and Social Security income, and must go into a nursing home.

Under current law, Medicaid in such a case counts the joint accounts and assets and the assets in the husband's name as available to pay for his nursing home bills. It will not start paying until most of this income and the assets are used up. This can leave the at-home spouse with virtually nothing.

Nursing home rates average about $22,000 a year per person, but in many areas are much higher, particularly for the better ones, mounting to $35,000 or higher.

At these prices, Mikulski said, when a person goes into a nursing home, the costs can eat up virtually all life savings and income, leaving the remaining spouse with almost nothing to live on.

"Each year thousands of elderly Americans -- middle-class couples who have played by the rules all their lives and built up modest savings -- are faced with financial ruin if one of them enters a nursing home for long-term care," Mikulski said.

Under current law, Mikulski noted, Medicare, the health insurance program for 32 million elderly or disabled Americans on Social Security, "generally does not pay for such long-term nursing-home care." It is designed primarily to pay for spells of acute illness.

So if a person is not well-to-do and able to pay for the nursing home, the only recourse is Medicaid, the medical welfare program for low-income people, which does pay for a nursing home.

But Medicaid generally will not start paying for the nursing home until the costs have reduced an individual's assets to a home, a car worth less than $4,500, a couple of thousand dollars in personal effects, and a few hundred dollars a month in income for the use of the remaining spouse.

Sen. Edward M. Kennedy (D-Mass.), cosponsor of the Mikulski amendment along with Sen. George J. Mitchell (D-Maine), said, "150,000 spouses will be bankrupt, lose all their life savings, unless the amendment or something close to it is actually accepted as part of this bill."

Strongly pushed by the American Association of Retired Persons and other groups of the elderly, the "spousal impoverishment" amendment seems almost certain to become law in some form.

In the House, Rep. Henry A. Waxman (D-Calif.), chairman of the subcommittee with jurisdiction over Medicaid, has won approval of a similar provision as part of both the House catastrophic and budget reconciliation bills. It carries a $925 cap for protected monthly income. The Senate Finance Committee also has inserted a provision in its version of the reconciliation bill.