Presentation on theme: "A Summary of the Medical Assistance Eligibility Rules LAURIE HANSON Long & Reher, P.A. 5881 Cedar Lake Road Minneapolis, Minnesota 55416 (952) 929-0622."— Presentation transcript:
A Summary of the Medical Assistance Eligibility Rules LAURIE HANSON Long & Reher, P.A Cedar Lake Road Minneapolis, Minnesota (952)
Private pay Medicare and supplemental insurance Long-term care insurance Veterans Home Medicaid/Medical Assistance Payment sources for long-term care services
What is Medicare? n Federal health insurance program for Social Security and Railroad Retirement recipients who: u have reached age 65 u have received SSDI for two years, OR u are suffering from chronic kidney disease.
Long-term care coverage under Medicare Long-term care coverage under Medicare: n 3 days of hospitalization and admitted to NH within 30 days of discharge n Skilled care only is covered n Maximum coverage: 100 days per spell of illness n After first 20 days, co-payment of $109.50/day in 2004
Medicare Supplemental Insurance policies n Must cover certain coinsurance payments under Medicare. n Will not cover care in nursing homes after the first 100 days, even if skilled. n Will not cover skilled care in nursing homes if Medicare itself is not paying. If Medicare doesn’t pay, neither does the supplemental policy.
What is Medical Assistance? n Medicaid -- A joint federal-state program created to serve certain categories of lower income, disabled, and elderly persons. Eligibility is based on need. n Governed by federal law. To participate in the Medicaid program, states must comply with federal law. n An entitlement program: If you qualify for benefits, you get benefits.
Home and community-based care programs in MN For persons 65 years old and older: n Elderly Waiver Program (EW) n Special Income Standard Elderly Waiver program (SIS EW) n Alternative Care program (AC) u Not a Medical Assistance program
Home and community-based programs in MN For persons under 65 years of age: n Mental Retardation or Related Conditions (MR/RC) n Community Alternative Care (CAC) n Community Alternatives for Disabled Individuals (CADI) n Traumatic Brain Injury (TBI)
MA ELIGIBILITY GENERAL REQUIREMENTS n Minnesota resident n Categorical Eligibility u Elderly: 65 and older u Blind u Disabled n Financial Eligibility u Assets and income
Financial eligibility for single person n Available assets: No more than $3,000. n Income: After allowable deductions, not enough to pay medical and LTC expenses each month.
Financial eligibility for married person with community spouse: n Available assets: No more than community spouse asset allowance plus $3,000 for LTC spouse. Spousal impoverishment rules apply. n Income: After allowable deductions, not enough to pay medical and LTC expenses each month.
Assets in general n Real 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. n Kinds of assets: u Available Assets u Excluded Assets u Unavailable assets
Available assets n Assets are available if u the owner has both legal authority and actual ability to use them for self-support and u assets are not excluded or unavailable. n Premarital agreement has no effect.
Excluded assets n Homestead n Household goods and personal effects n One motor vehicle n Assets of trade or business n Insurance payments to repair or replace lost, damaged, or destroyed property n CSV of certain insurance policies n Burial funds
Unavailable assets Unavailable assets are those that have a legal or actual barrier to being liquidated. They can include: n Jointly held assets n Share of estate that has not been probated n Property involved in pending legal action n Life estate interest in real property n Real property not used as homestead: reasonable effort to sell
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
Kinds of trusts n Revocable trust n Medicaid qualifying trust n Trust with springing provisions n Supplemental needs trust n Special needs trust n Pooled trust
Jointly held assets n General rule: Presumption that joint tenants own pro rata share n Exception: Checking or savings account, time deposits owned by MA applicant n Savings bonds: Unavailable if owned jointly and in possession of person who is not applying for MA
Case Study: Single person Assets owned: Homestead (sole owner) Farm property, owned with brother Irrevocable burial fund Checking account, joint with brother Car, value $4,000 Household furnishings
Case Study: Single person Assets owned: Homestead (sole owner)Excluded Farm property, owned with brother Irrevocable burial fund Checking account, joint with brother Car, value $4,000 Household furnishings
Case Study: Single person Assets owned: Homestead (sole owner)Excluded Farm property, owned with brother Unavailable Irrevocable burial fund Checking account, joint with brother Car, value $4,000 Household furnishings
Case Study: Single person Assets owned: Homestead (sole owner)Excluded Farm property, owned with brother Unavailable Irrevocable burial fundExcluded Checking account, joint with brother Car, value $4,000 Household furnishings
Case Study: Single person Assets owned: Homestead (sole owner)Excluded Farm property, owned with brother Unavailable Irrevocable burial fundExcluded Checking account, joint with brotherAvailable Car, value $4,000 Household furnishings
Case Study: Single person Assets owned: Homestead (sole owner)Excluded Farm property, owned with brother Unavailable Irrevocable burial fundExcluded Checking account, joint with brotherAvailable Car, value $4,000Excluded Household furnishings
Case Study: Single person Assets owned: Homestead (sole owner)Excluded Farm property, owned with brother Unavailable Irrevocable burial fundExcluded Checking account, joint with brotherAvailable Car, value $4,000Excluded Household furnishingsExcluded
Income deductions Pay all income after following deductions made: n Reparation and restitution payments n Medicare premiums n Personal needs allowance of $74, $90 for vets n G/C fees, 5% of income up to $100 n Community spouse income allocation n Family member allocation n Reasonable and necessary medical expenses Balance must be paid to the nursing home.
Income Spenddown for Single Person: EXAMPLE n Income of Individual $1, u less Medicare Part B u less personal needs allowance u less insurance premium Income applied to care $ n Cost of Care $5, u less MA pays: $4,681.00
What if the MA recipient is married? Spousal Impoverishment Rules Apply n LTC spouse in NH or Elderly Waiver n Community spouse in community n Asset Assessment Date: u NH/HH, completed only once n Community spouse asset allowance n Income allocation to community spouse
Community spouse asset allowance n CSAA = 1/2 of non-excluded assets on asset assessment date with a u Minimum of $26,190 and u Maximum of $92,760 n Allowable assets at time of MA application = CSAA + $3,000
Date of Institutionalization n Protected Assets: u CSAA $26,190 u MA limit $ 3,000 n Excess Assets: $ 5,810 Date of MA application, if in 2004: $26,190$3,000 $35,000
Date of Institutionalization n Protected Assets: u CSAA $50,000 u MA limit $ 3,000 n Excess Assets: $47,000 Date of MA application: $50,000$3,000 $100,000
Date of Institutionalization n Protected Assets: u CSAA $ 92,760 u MA limit $ 3,000 n Excess Assets $104,240 Date of MA application, if in 2004: $92,760$3,000 $200,000
Income Spenddown for Married Recipient n Income of LTC spouse$2, n Income of community spouse$ CS is not required to pay any of her income for the care of the LTC spouse BUT How is CS going to live on $700/month?
Minimum income allowance for community spouse Standard of $1,562 per month n Increased by amount shelter expenses exceed $469, up to cap of $2,319 n Shelter expenses include: u Mortgage or rent u Property taxes u Utilities u Fire insurance u Association fee
Increased asset allowance based on income n If total income of both spouses is less than the CS’s minimum income allowance, the CSAA can be increased. n All retained assets must be income-producing. n Can occur when income is low and shelter expenses are relatively high. IMPORTANT: ALWAYS REVIEW BOTH ASSETS AND INCOME
Assets Eligible? Income Is reduction of assets necessary?
REDUCING ASSETS n Pay monthly expenses n Purchase excluded assets n Pay off debts n Prepay funeral expenses n Make repairs or improvements to house n Transfer assets
Transfer Warnings n Federal law 1997: Makes it a misdemeanor for paid advisor to counsel or assist in transfers if results in penalty period. Found to be unconstitutional. n Minnesota law 2003: Not enforceable until federal waiver is given or federal law changes n Loss of ownership and control: once given away, assets are no longer yours.
Basic Transfer Rule n Transfers of assets or income u By applicant or applicant’s spouse u For less than FMV u During “lookback period”: F 36 months preceding MA application for transfers to people F 60 months preceding MA application for transfers to and from certain trusts u Ineligible for LTC coverage for a specific period of time
Period of ineligibility n Add total uncompensated transfers in any month of the 36 months preceding the MA application u Value of transfer = FMV of asset less liens and encumbrances and compensation received n Divide by average monthly cost of NH care in Minnesota, currently $4,111 n Penalty period begins the month after the first transfer
Transfer $15,000 in June 2004 $15,000 ÷ $4,111 = 3.64 months PERIOD OF INELIGIBILITY Transfer made in June 7/ /04 (.64)
Transfer $50,000 in June 2004 $50,000 ÷ $4,111 = months PERIOD OF INELIGIBILITY Transfer made in June 7/ /05 (.16)
Transfer $200,000 in June 2004 $200,000 ÷ $4,111 = months Period of Ineligibility If apply before July 2007 (within 36 months), full POI is imposed. If wait to apply until after 36 months: June July 2007 The effective waiting period is 37 months. APPLY JULY 2007 AT THE EARLIEST
A transfer occurs when: An applicant or spouse n Sells n Gives away n Reduces ownership interest n Reduces control n Disposes of asset or interest therein n Waives right to or refuses inheritance u Refuses to claim elective share u Disclaims
Allowable transfers of home n To spouse n To child under 21 n To blind or disabled child n To sibling with equity interest n To caretaker child n For value n Denial of eligibility causes undue hardship
Other exceptions to transfer rules n $200 or less per month n To spouse at any time, or to 3rd person for sole benefit or spouse n To disabled or blind child or SNT for sole benefit of child n Transfer into SNT for sole benefit of any disabled person under age 65
Other exceptions to transfer rules n Excluded assets other than homestead n All transfers have been returned to individual. The POI can be reduced by return of some of the transferred assets. n Intended to sell for FMV or other valuable consideration n Denial of eligibility causes undue hardship
Proposed changes in transfer law See waiver request at n 72-month lookback period n Average payment used for divisor n POI begins in month person applies and is eligible for MA n Complete ineligibility for MA
Proposed changes to transfer law (cont.) n Homestead cannot be transferred to spouse, sibling, caretaker child, disabled child, child under 21 n No transfers to spouse after MA eligibility n No transfers to blind/disabled child n No transfers of excluded assets n DHS will decide permissible purposes of trusts
Liens and Estate Recovery n Medical Assistance and Alternative Care liens n Notice of Potential Claim against real estate interests n Elective share claims n Estate recovery, including claims against life estate and joint tenancy interests
Thank you for your attention! Long & Reher, P.A Cedar Lake Road Minneapolis, Minnesota (952)