Presentation on theme: "A Summary of the Medical Assistance Eligibility Rules"— Presentation transcript:
1 A Summary of the Medical Assistance Eligibility Rules 4/14/2017A Summary of the Medical Assistance Eligibility RulesLAURIE HANSONLong & Reher, P.A.5881 Cedar Lake RoadMinneapolis, Minnesota 55416(952)
2 Payment sources for long-term care services Private payMedicare and supplemental insuranceLong-term care insuranceVeterans HomeMedicaid/Medical Assistance
3 What is Medicare?Federal health insurance program for Social Security and Railroad Retirement recipients who:have reached age 65have received SSDI for two years, ORare suffering from chronic kidney disease.
4 Long-term care coverage under Medicare 3 days of hospitalization and admitted to NH within 30 days of dischargeSkilled care only is coveredMaximum coverage: 100 days per spell of illnessAfter first 20 days, co-payment of $109.50/day in 2004
5 Medicare Supplemental Insurance policies Must cover certain coinsurance payments under Medicare.Will not cover care in nursing homes after the first 100 days, even if skilled.Will not cover skilled care in nursing homes if Medicare itself is not paying. If Medicare doesn’t pay, neither does the supplemental policy.
6 What is Medical Assistance? Medicaid -- A joint federal-state program created to serve certain categories of lower income, disabled, and elderly persons. Eligibility is based on need.Governed by federal law. To participate in the Medicaid program, states must comply with federal law.An entitlement program: If you qualify for benefits, you get benefits.
7 Home and community-based care programs in MN For persons 65 years old and older:Elderly Waiver Program (EW)Special Income Standard Elderly Waiver program (SIS EW)Alternative Care program (AC)Not a Medical Assistance program
8 Home and community-based programs in MN For persons under 65 years of age:Mental Retardation or Related Conditions (MR/RC)Community Alternative Care (CAC)Community Alternatives for Disabled Individuals (CADI)Traumatic Brain Injury (TBI)
9 MA ELIGIBILITY GENERAL REQUIREMENTS 4/14/2017MA ELIGIBILITY GENERAL REQUIREMENTSMinnesota residentCategorical EligibilityElderly: 65 and olderBlindDisabledFinancial EligibilityAssets and income
10 Financial eligibility for single person Available assets:No more than $3,000.Income:After allowable deductions, not enough to pay medical and LTC expenses each month.
11 Financial eligibility for married person with community spouse: Available assets:No more than community spouse asset allowance plus $3,000 for LTC spouse. Spousal impoverishment rules apply.Income:After allowable deductions, not enough to pay medical and LTC expenses each month.
12 4/14/2017Assets in generalReal property, household furnishings and wearing apparel, investments including savings and checking accounts, stocks, bonds, CDs, contracts for deed, mortgages, IRAs, collections, cash surrender value of life insurance policies, etc.Kinds of assets:Available AssetsExcluded AssetsUnavailable assets
13 Available assets Assets are available if the owner has both legal authority and actual ability to use them for self-support andassets are not excluded or unavailable.Premarital agreement has no effect.
14 Excluded assets Homestead Household goods and personal effects One motor vehicleAssets of trade or businessInsurance payments to repair or replace lost, damaged, or destroyed propertyCSV of certain insurance policiesBurial funds
15 Unavailable assetsUnavailable assets are those that have a legal or actual barrier to being liquidated. They can include:Jointly held assetsShare of estate that has not been probatedProperty involved in pending legal actionLife estate interest in real propertyReal property not used as homestead: reasonable effort to sell
16 Trusts: available? Depends on: (1) Kind of trust involved (2) Who established the trust(3) Whose assets were used to fund the trust(4) Whether the trust is revocable or irrevocable(5) Whether trust was established during lifetime or through a will(6) Provisions of the trust agreement
17 Kinds of trusts Revocable trust Medicaid qualifying trust Trust with springing provisionsSupplemental needs trustSpecial needs trustPooled trust
18 Jointly held assetsGeneral rule: Presumption that joint tenants own pro rata shareException: Checking or savings account, time deposits owned by MA applicantSavings bonds: Unavailable if owned jointly and in possession of person who is not applying for MA
19 Case Study: Single person Assets owned:Homestead (sole owner)Farm property, owned with brotherIrrevocable burial fundChecking account, joint with brotherCar, value $4,000Household furnishings
20 Case Study: Single person Assets owned:Homestead (sole owner) ExcludedFarm property, owned with brotherIrrevocable burial fundChecking account, joint with brotherCar, value $4,000Household furnishings
21 Case Study: Single person Assets owned:Homestead (sole owner) ExcludedFarm property, owned with brother UnavailableIrrevocable burial fundChecking account, joint with brotherCar, value $4,000Household furnishings
22 Case Study: Single person Assets owned:Homestead (sole owner) ExcludedFarm property, owned with brother UnavailableIrrevocable burial fund ExcludedChecking account, joint with brotherCar, value $4,000Household furnishings
23 Case Study: Single person Assets owned:Homestead (sole owner) ExcludedFarm property, owned with brother UnavailableIrrevocable burial fund ExcludedChecking account, joint with brother AvailableCar, value $4,000Household furnishings
24 Case Study: Single person Assets owned:Homestead (sole owner) ExcludedFarm property, owned with brother UnavailableIrrevocable burial fund ExcludedChecking account, joint with brother AvailableCar, value $4, ExcludedHousehold furnishings
25 Case Study: Single person Assets owned:Homestead (sole owner) ExcludedFarm property, owned with brother UnavailableIrrevocable burial fund ExcludedChecking account, joint with brother AvailableCar, value $4, ExcludedHousehold furnishings Excluded
26 Income deductions Balance must be paid to the nursing home. Pay all income after following deductions made:Reparation and restitution paymentsMedicare premiumsPersonal needs allowance of $74, $90 for vetsG/C fees, 5% of income up to $100Community spouse income allocationFamily member allocationReasonable and necessary medical expensesBalance must be paid to the nursing home.
27 Income Spenddown for Single Person: EXAMPLE Income of Individual $1,000.60less Medicare Part Bless personal needs allowanceless insurance premiumIncome applied to care $759.00Cost of Care $5,440.00lessMA pays: $4,681.00
28 What if the MA recipient is married? 4/14/2017What if the MA recipient is married?Spousal Impoverishment Rules ApplyLTC spouse in NH or Elderly WaiverCommunity spouse in communityAsset Assessment Date:NH/HH, completed only onceCommunity spouse asset allowanceIncome allocation to community spouse
29 Community spouse asset allowance CSAA = 1/2 of non-excluded assets on asset assessment date with aMinimum of $26,190andMaximum of $92,760Allowable assets at time of MA application =CSAA + $3,000
30 Date of Institutionalization $35,000Protected Assets:CSAA $26,190MA limit $ 3,000Excess Assets: $ 5,810Date of MA application, if in 2004:$26, $3,000
31 Date of Institutionalization $100,000Protected Assets:CSAA $50,000MA limit $ 3,000Excess Assets: $47,000Date of MA application:$50, $3,000
32 Date of Institutionalization $200,000Protected Assets:CSAA $ 92,760MA limit $ 3,000Excess Assets $104,240Date of MA application, if in 2004:$92, $3,000
33 Income Spenddown for Married Recipient Income of LTC spouse $2,000.60Income of community spouse $CS is not required to pay any of her income for the care of the LTC spouseBUTHow is CS going to live on $700/month?
34 Minimum income allowance for community spouse Standard of $1,562 per monthIncreased by amount shelter expenses exceed $469, up to cap of $2,319Shelter expenses include:Mortgage or rentProperty taxesUtilitiesFire insuranceAssociation fee
35 Increased asset allowance based on income If total income of both spouses is less than the CS’s minimum income allowance, the CSAA can be increased.All retained assets must be income-producing.Can occur when income is low and shelter expenses are relatively high.IMPORTANT: ALWAYS REVIEW BOTH ASSETS AND INCOME
36 Assets Eligible? Income Is reduction of assets necessary?
37 REDUCING ASSETS Pay monthly expenses Purchase excluded assets Pay off debtsPrepay funeral expensesMake repairs or improvements to houseTransfer assets
38 Transfer WarningsFederal law 1997: Makes it a misdemeanor for paid advisor to counsel or assist in transfers if results in penalty period. Found to be unconstitutional.Minnesota law 2003: Not enforceable until federal waiver is given or federal law changesLoss of ownership and control: once given away, assets are no longer yours.
39 Basic Transfer Rule Transfers of assets or income By applicant or applicant’s spouseFor less than FMVDuring “lookback period”:36 months preceding MA application for transfers to people60 months preceding MA application for transfers to and from certain trustsIneligible for LTC coverage for a specific period of time
40 Period of ineligibility Add total uncompensated transfers in any month of the 36 months preceding the MA applicationValue of transfer = FMV of asset less liens and encumbrances and compensation receivedDivide by average monthly cost of NH care in Minnesota, currently $4,111Penalty period begins the month after the first transfer
41 Transfer $15,000 in June 2004 $15,000 ÷ $4,111 = 3.64 months PERIOD OF INELIGIBILITYTransfer made in June7/ /04 (.64)
42 Transfer $50,000 in June 2004 $50,000 ÷ $4,111 = 12.16 months PERIOD OF INELIGIBILITYTransfer made in June7/ /05 (.16)
43 Transfer $200,000 in June 2004 $200,000 ÷ $4,111 = 48.64 months Period of IneligibilityIf apply before July 2007 (within 36 months), full POI is imposed.If wait to apply until after 36 months:June July 2007The effective waiting period is 37 months.APPLY JULY 2007 AT THE EARLIEST
44 A transfer occurs when: An applicant or spouseSellsGives awayReduces ownership interestReduces controlDisposes of asset or interest thereinWaives right to or refuses inheritanceRefuses to claim elective shareDisclaims
45 Allowable transfers of home To spouseTo child under 21To blind or disabled childTo sibling with equity interestTo caretaker childFor valueDenial of eligibility causes undue hardship
46 Other exceptions to transfer rules $200 or less per monthTo spouse at any time, or to 3rd person for sole benefit or spouseTo disabled or blind child or SNT for sole benefit of childTransfer into SNT for sole benefit of any disabled person under age 65
47 Other exceptions to transfer rules Excluded assets other than homesteadAll transfers have been returned to individual. The POI can be reduced by return of some of the transferred assets.Intended to sell for FMV or other valuable considerationDenial of eligibility causes undue hardship
48 Proposed changes in transfer law See waiver request at http://www. dhs 72-month lookback periodAverage payment used for divisorPOI begins in month person applies and is eligible for MAComplete ineligibility for MA
49 Proposed changes to transfer law (cont.) Homestead cannot be transferred to spouse, sibling, caretaker child, disabled child, child under 21No transfers to spouse after MA eligibilityNo transfers to blind/disabled childNo transfers of excluded assetsDHS will decide permissible purposes of trusts
50 Liens and Estate Recovery Medical Assistance and Alternative Care liensNotice of Potential Claim against real estate interestsElective share claimsEstate recovery, including claims against life estate and joint tenancy interests
51 Thank you for your attention! 4/14/2017Thank you for your attention!Long & Reher, P.A.5881 Cedar Lake RoadMinneapolis, Minnesota 55416(952)