Issue: Three Month Retroactivity –
Previous Rule: When determining retroactive eligibility, the Department did not consider as available resources used for certain expenses (legal fees or pre-paid funeral and burial contracts) in determining eligibility for any of the three months preceding the month of application, regardless of whether the expenditure was made in the first, second or third retroactive month. This increased the likelihood of a person becoming eligible.
Current Rule: Eligibility for each retroactive month will be determined based on the amount of resources and income that are available in that month. Exemptions for allowable expenditures will be recognized only for the month in which they are made. For example, if the retroactive period is January through March, $5,000 spent in March to buy a funeral and burial contract was available to pay for the person’s own care in January and, therefore, the individual would not be found eligible for HFS-paid long term care coverage for January.
Issue: Pooled Trusts –
Previous Rule: Transfers of assets to pooled trusts managed by non-profit associations solely for the benefit of a disabled beneficiary who was of any age were considered transfers for fair market value. Funds remaining in the individual’s pooled trust account up to the amount expended by the Department for medical assistance were paid to the Department upon the death of the person, except to the extent the funds were retained by the trust for the benefit of other beneficiaries of the trust.
Current Rule: Subaccounts in pooled trusts that meet state and federal requirements are exempt. however, a transfer to a pooled trust subaccount after age 65 is considered a transfer for less than fair market value, unless the person is considered a ward of the county or State. Funds remaining in a subaccount must continue to be paid to the State up to the amount expended by the State for the person’s medical assistance except the trust may only retain funds to the extent necessary to wrap up the affairs of the subaccount.
Issue: Exemption - Income Producing Farmland –
Previous Rule: Resources necessary for self-support (land, building, equipment) are exempt up to $6,000, provided the property produces a net annual income of at least 6% of the excluded equity value of the property. Previous rules totally exempted farmland and personal property used in income producing operations.
Current Rule: The same limitations on income producing property are now applied to farmland and personal property.
Issue: Home Equity –
Previous Rule: The amount of equity interest in a home protected as an exempt resource was the federal maximum, $750,000 (increased annually by a CPI percentage).
Current Rule: The amount of equity interest a person may maintain in their home is the minimum required under federal law (annually indexed by a CPI percentage), currently $525,000.
Issue: Spousal Impoverishment Standards –
Previous Rule: Institutionalized spouses could divert income and resources to their spouse in the community up to the maximum limits permitted under federal law. These maximums were increased annually by any increases in the Consumer Price Index (CPI).
Current Rule: The amounts of income and resources that can be diverted to a community spouse living is $109,560 in resources and $2,739 per month in income. These amounts will only increase if they are ever exceeded by the minimum amounts allowed under federal law.
Issue: Spousal Refusal –
Previous Rule: When a community spouse refuses to disclose and make available relevant information concerning resources the rule gave the Department general authority to pursue any available legal process to enforce its right to support against the community spouse.
Current Rule: A spouse’s failure to disclose the amount of available resources can result in denial of eligibility for long term care for failure to cooperate. The Department maintains its general authority to enforce its support rights when a spouse refuses to make available resources for the support of the institutionalized spouse, and remedies available to the Department are specified, including: 1) Support orders may be established administratively or through the circuit courts; and 2) The Department may proceed through actions for support, recovery of assistance, or both.
Issue: Homestead Property, Placed in a Trust –
Previous Rule: The Homestead (residence and contiguous real estate) is an exempt resource for eligibility purposes. The homestead exemption is retained as long as the institutionalized individual has the intent to return home. The Department could place a lien on homestead property unless the property is held in trust. Thus by placing property in trust, a person could defeat a legitimate means by which the State could recover some of the costs for care it paid on behalf of the person.
Current Rule: Real property placed in trust is not exempt unless the person’s spouse, minor child or disabled child resides in the property.
Issue: Funeral and Burial –
Previous Rule: The previous rule provided for a cap of $10,000 on irrevocable prepaid funeral and burial contracts funded with either cash or through the assignment of a life insurance policy on the person’s life. The cap extended to both funeral goods and services.
Current Rule: Irrevocable prepaid funeral burial contracts funded with cash are exempt up to $5874, except there is no cap on the purchase of items related to the burial space. No limits are placed on prepaid funeral burial contracts funded by the irrevocable assignment of life insurance. To be exempt, either type of contract must name the State as the remainder beneficiary (up to the amount of medical assistance paid) and specify the goods and services to be provided and their price.