1. A Summary of the Medical Assistance Eligibility Rules
4/14/2017
A Summary of the Medical Assistance Eligibility Rules
LAURIE HANSON
Long & Reher, P.A.
5881 Cedar Lake Road
Minneapolis, Minnesota 55416
(952)

2. Payment sources for long-term care services
Private pay
Medicare and supplemental insurance
Long-term care insurance
Veterans Home
Medicaid/Medical Assistance

3. What is Medicare?
Federal health insurance program for Social Security and Railroad Retirement recipients who:
have reached age 65
have received SSDI for two years, OR
are suffering from chronic kidney disease.

4. Long-term care coverage under Medicare
3 days of hospitalization and admitted to NH within 30 days of discharge
Skilled care only is covered
Maximum coverage: 100 days per spell of illness
After 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
4/14/2017
MA ELIGIBILITY GENERAL REQUIREMENTS
Minnesota resident
Categorical Eligibility
Elderly: 65 and older
Blind
Disabled
Financial Eligibility
Assets 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. 4/14/2017
Assets in general
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.
Kinds of assets:
Available Assets
Excluded Assets
Unavailable assets

13. Available assets Assets are available if
the owner has both legal authority and actual ability to use them for self-support and
assets are not excluded or unavailable.
Premarital agreement has no effect.

14. Excluded assets Homestead Household goods and personal effects
One motor vehicle
Assets of trade or business
Insurance payments to repair or replace lost, damaged, or destroyed property
CSV of certain insurance policies
Burial funds

15. Unavailable assets
Unavailable assets are those that have a legal or actual barrier to being liquidated. They can include:
Jointly held assets
Share of estate that has not been probated
Property involved in pending legal action
Life estate interest in real property
Real 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 provisions
Supplemental needs trust
Special needs trust
Pooled trust

18. Jointly held assets
General rule: Presumption that joint tenants own pro rata share
Exception: Checking or savings account, time deposits owned by MA applicant
Savings 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 brother
Irrevocable burial fund
Checking account, joint with brother
Car, value $4,000
Household furnishings

20. 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

21. 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

22. Case Study: Single person
Assets owned:
Homestead (sole owner) Excluded
Farm property, owned with brother Unavailable
Irrevocable burial fund Excluded
Checking account, joint with brother
Car, value $4,000
Household furnishings

23. Case Study: Single person
Assets owned:
Homestead (sole owner) Excluded
Farm property, owned with brother Unavailable
Irrevocable burial fund Excluded
Checking account, joint with brother Available
Car, value $4,000
Household furnishings

24. Case Study: Single person
Assets owned:
Homestead (sole owner) Excluded
Farm property, owned with brother Unavailable
Irrevocable burial fund Excluded
Checking account, joint with brother Available
Car, value $4, Excluded
Household furnishings

25. Case Study: Single person
Assets owned:
Homestead (sole owner) Excluded
Farm property, owned with brother Unavailable
Irrevocable burial fund Excluded
Checking account, joint with brother Available
Car, value $4, Excluded
Household furnishings Excluded

26. Income deductions Balance must be paid to the nursing home.
Pay all income after following deductions made:
Reparation and restitution payments
Medicare premiums
Personal needs allowance of $74, $90 for vets
G/C fees, 5% of income up to $100
Community spouse income allocation
Family member allocation
Reasonable and necessary medical expenses
Balance must be paid to the nursing home.

27. Income Spenddown for Single Person: EXAMPLE
Income of Individual $1,000.60
less Medicare Part B
less personal needs allowance
less insurance premium
Income applied to care $759.00
Cost of Care $5,440.00
less
MA pays: $4,681.00

28. What if the MA recipient is married?
4/14/2017
What if the MA recipient is married?
Spousal Impoverishment Rules Apply
LTC spouse in NH or Elderly Waiver
Community spouse in community
Asset Assessment Date:
NH/HH, completed only once
Community spouse asset allowance
Income allocation to community spouse

29. Community spouse asset allowance
CSAA = 1/2 of non-excluded assets on asset assessment date with a
Minimum of $26,190
and
Maximum of $92,760
Allowable assets at time of MA application =
CSAA + $3,000

30. Date of Institutionalization
$35,000
Protected Assets:
CSAA $26,190
MA limit $ 3,000
Excess Assets: $ 5,810
Date of MA application, if in 2004:
$26, $3,000

31. Date of Institutionalization
$100,000
Protected Assets:
CSAA $50,000
MA limit $ 3,000
Excess Assets: $47,000
Date of MA application:
$50, $3,000

32. Date of Institutionalization
$200,000
Protected Assets:
CSAA $ 92,760
MA limit $ 3,000
Excess Assets $104,240
Date of MA application, if in 2004:
$92, $3,000

33. Income Spenddown for Married Recipient
Income of LTC spouse $2,000.60
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?

34. Minimum income allowance for community spouse
Standard of $1,562 per month
Increased by amount shelter expenses exceed $469, up to cap of $2,319
Shelter expenses include:
Mortgage or rent
Property taxes
Utilities
Fire insurance
Association 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 debts
Prepay funeral expenses
Make repairs or improvements to house
Transfer assets

38. Transfer Warnings
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.
Minnesota law 2003: Not enforceable until federal waiver is given or federal law changes
Loss 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 spouse
For less than FMV
During “lookback period”:
36 months preceding MA application for transfers to people
60 months preceding MA application for transfers to and from certain trusts
Ineligible 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 application
Value of transfer = FMV of asset less liens and encumbrances and compensation received
Divide by average monthly cost of NH care in Minnesota, currently $4,111
Penalty period begins the month after the first transfer

41. Transfer $15,000 in June 2004 $15,000 ÷ $4,111 = 3.64 months
PERIOD OF INELIGIBILITY
Transfer made in June
7/ /04 (.64)

42. Transfer $50,000 in June 2004 $50,000 ÷ $4,111 = 12.16 months
PERIOD OF INELIGIBILITY
Transfer made in June
7/ /05 (.16)

43. Transfer $200,000 in June 2004 $200,000 ÷ $4,111 = 48.64 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

44. A transfer occurs when:
An applicant or spouse
Sells
Gives away
Reduces ownership interest
Reduces control
Disposes of asset or interest therein
Waives right to or refuses inheritance
Refuses to claim elective share
Disclaims

45. Allowable transfers of home
To spouse
To child under 21
To blind or disabled child
To sibling with equity interest
To caretaker child
For value
Denial of eligibility causes undue hardship

46. Other exceptions to transfer rules
$200 or less per month
To spouse at any time, or to 3rd person for sole benefit or spouse
To disabled or blind child or SNT for sole benefit of child
Transfer into SNT for sole benefit of any disabled person under age 65

47. Other exceptions to transfer rules
Excluded assets other than homestead
All 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 consideration
Denial of eligibility causes undue hardship

48. Proposed changes in transfer law See waiver request at http://www. dhs
72-month lookback period
Average payment used for divisor
POI begins in month person applies and is eligible for MA
Complete ineligibility for MA

49. Proposed changes to transfer law (cont.)
Homestead cannot be transferred to spouse, sibling, caretaker child, disabled child, child under 21
No transfers to spouse after MA eligibility
No transfers to blind/disabled child
No transfers of excluded assets
DHS will decide permissible purposes of trusts

50. Liens and Estate Recovery
Medical Assistance and Alternative Care liens
Notice of Potential Claim against real estate interests
Elective share claims
Estate recovery, including claims against life estate and joint tenancy interests

51. Thank you for your attention!
4/14/2017
Thank you for your attention!
Long & Reher, P.A.
5881 Cedar Lake Road
Minneapolis, Minnesota 55416
(952)