1 Spring Seminar -- Medicaid Update Applicable Divisors for Disqualification purposes From around New England Connecticut Revokes its Request for a Waiver… Will other States (including Massachusetts) Follow? by Leo J. Cushing, Esq., CPA, LLM Todd E. Lutsky, Esq., LLM Cushing & Dolan, P.C. Attorneys at Law 24 School Street, Suite 300 Boston, MA Telephone: (617) Fax: (617) J une 3, 2005

2 1.By statute, the DMA is required to apply to the federal government, Secretary of the United States Department of Health and Human Services, to allow a waiver so the Commonwealth of Massachusetts can make the following changes: A.Change to a later date the time currently provided by federal law for starting the penalty period for persons who transfer assets for less than fair market value; B.Require excess assets to be spent on health care and other necessary living expenses; C. To treat annuities similar to trusts and require the Commonwealth to be the beneficiary, to the extent that MassHealth benefits are provided; and D. Increase look back periods for real estate transfers and transfers into irrevocable trusts, with an exception for transfers of assets up to $300,000 from a primary residence shall not be affected by such waiver.

3 Planning Note: It appears that under these new transfer rules, no one could make a gift as the penalty period would never begin to run prior to applying for MassHealth benefits. However, the old 36-month look back period for transfers to individuals and the old 60-month look back period for transfers to trusts have not changed. Therefore, the actual penalty period for a transfer to an individual would never be longer than 36 months and a transfer to an irrevocable trust would never be long than 60 months from the date of transfer. Planning Note: Connecticut has revoked its request for a waiver and Massachusetts is currently debating a bill to revoke its waiver request.

4 Key Medicaid Information for Massachusetts 1.Protections for the Community Spouse Community Spouse Resource Allowance (CSRA)Minimum $19,020Maximum $95,100 Increase CSRA:No standard policy, but a fair hearing can be obtained. Massachusetts follows the income first rule. Annuities:Actuarially sound annuities are permitted, with certain restrictions. Monthly Maintenance Needs Allows:Minimum $1,561.25(effective 7/1/05 Minimum $1,604.00) Maximum $2, Transfers Average monthly cost of nursing home care according to state$6,960 home care according to state: 3.Income Is the state an income cap state?No 4.Estate Recovery A.Has the state expanded the definition definition of “estate” beyond the probate estate? No B.Has the state included a hardship provision in the estate recovery plan? Yes

5 Key Medicaid Information for New Hampshire 1.Protections for the Community Spouse Community Spouse ResourceMinimum $19,020 Allowance (CSRA):Maximum $95,100 Increase CSRA: No standard policy, but a fair hearing can be obtained. New Hampshire follows the income first rule. Annuities: Actuarially sound annuities are permitted, with certain restrictions. Monthly Maintenance Needs Allows:Minimum $1, (effective July 1, 2005 Minimum $1,604.00) Maximum $2,377.50

6 2.Transfers Average monthly cost of nursing home care according to state:$6, Income Is the state an income cap state?No 4.Estate Recovery A.Has the state expanded the definition Yes definition of “estate” beyond the probate estate? B.Has the state included a hardshipYes provision in the estate recovery plan? (estate allowed to seek recovery against assets held in revocable trust created or funded after January 1, 1999)

7 Key Medicaid Information for Vermont 1.Protections for the Community Spouse Community Spouse ResourceMinimum $19,020 Allowance (CSRA):Maximum $95,100 Increase CSRA:Permitted. Vermont follows the income first rule. Annuities:Actuarially sound annuities are permitted, with certain restrictions. Monthly Maintenance Needs Allows:Minimum $1, (effective July 1, 2005 Minimum $1,604.00) Maximum $2, Transfers Average monthly cost of nursing home care according to state: $5,580.00

8 3.Income Is the state an income cap state?No 4.Estate Recovery A.Has the state expanded the definition No definition of “estate” beyond the probate estate? B.Has the state included a hardshipYes provision in the estate recovery plan?

9 Key Medicaid Information for Connecticut 1.Protections for the Community Spouse Community Spouse ResourceMinimum $19,020 Allowance (CSRA):Maximum $95,100 Increase CSRA:Permitted. Connecticut follows the income first rule. Annuities:Actuarially sound annuities are not permitted. Monthly Maintenance Needs Allows:Minimum $1, (effective July 1, 2005 Minimum $1,604.00) Maximum $2, Transfers Average monthly cost of nursing home care according to state: $7, (Will change July 1, 2005)

10 3.Income Is the state an income cap state?No 4.Estate Recovery A.Has the state expanded the definition definition of “estate” beyond the probate estate?No B.Has the state included a hardship provision in the estate recovery plan? No (Connecticut Home Care Program for the elderly has an income cap.)

11 Key Medicaid Information for Rhode Island 1.Protections for the Community Spouse Community Spouse ResourceMinimum $19,020 Allowance (CSRA):Maximum $95,100 Increase CSRA:Permitted. Rhode Island does not follow the income first rule. Annuities:Actuarially sound annuities are permitted. 2.Transfers Average monthly cost of nursing home care according to state: $5,485.00

12 3.Income Is the state an income cap state?No 4.Estate Recovery A.Has the state expanded the definition No definition of “estate” beyond the probate estate? B.Has the state included a hardshipYes provision in the estate recovery plan?