Medical Assistance Eligibility: Fundamentals of Minnesota Health Care Programs for Seniors

1. Medical Assistance Eligibility:Fundamentals of Minnesota Health Care Programs for Seniors MSBA Elder Law Section Member Education & Greater Minnesota Committees 1

2. Sources of Law/Policy • 42 U.S.C. § 1396a, et seq. • Minn. Stat. § 256B, et seq. • Minnesota Department of Human Services (DHS) Health Care Programs Manual (HCPM) www.dhs.state.mn.us

3. MA COVERED SERVICES Hospitalization, physician services, laboratory, and x-ray services Some dental and eye care, medical supplies, and treatments Transportation, prescription drugs (some), hospice, day treatment programs, and special education programs Occupational, physical, and speech therapies Hearing aids Mental health services See Minn. Stat. 256B.0625 for complete list AND… 3

4. LONG-TERM CARE SERVICES • For people who need assistance with activities of daily living, such as bathing, dressing, eating, transferring: • Personal care assistants, private duty nursing • Nursing home coverage • Home health care • Modifications to home or car • Respite • Case management, etc. 4

5. MA ELIGIBILITY BASIC REQUIREMENTS • Minnesota resident • Citizenship requirements • Categorical eligibility • Elderly: 65 and older • Blind • Disabled • Financial eligibility • Assets and income 5

6. Basic Financial Eligibility • Single • $3,000 in available assets • Income spenddown • Married • Community spouse asset allowance + $3,000 • Income spenddown 6

7. MA ASSET RULES 7

8. KINDS OF ASSETS • Available assets • Excluded assets • Unavailable assets 8

9. 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 • Include savings and checking accounts, stocks, bonds, CDs, contracts for deed, IRAs, certain real property, collections, cash surrender value of life insurance policies, etc. • Premarital agreement has no effect 9

10. Excluded assets • Homestead, limited to $500,000 in equity in certain circumstances • 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 – prepayment of funeral expenses 10

11. Unavailable assets • Must prove legal or actual barrier to disposal of asset that cannot be overcome. Unavailable assets include: • Certain 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 • Certain CCRC entrance fees 11

12. Asset Limit: Single Person: Married Couple: • $3,000 “available” assets • Any amount of “excluded” and “unavailable” assets • Long-term care spouse can retain $3,000 in “available” assets • Community spouse retains community spouse asset allowance • Any amount of “excluded” and “unavailable” assets

13. MA INCOME RULES 13

14. Income deductions Pay all income after following deductions are made: • Reparation and restitution payments • Medicare premiums • Personal needs allowance of $89; $90 for vets • G/C fees, 5% of income up to $100 • Community spouse income allocation • Family member allocation • Reasonable and necessary medical expenses 14

15. Income rules for recipients in the community • MA recipient is required to pay portion of income towards cost of services • Income standards for persons living in community: • 100% FPG, currently $903, OR • Spending down to 75% FPG ($677) 15

16. Income spenddown for single person in community: • Income of Individual $2,000.40 • less Medicare Part B -96.40 • less standard -677.00 • less insurance premium -100.00 Income applied to care $1,127.00 • Cost of Care $5,440.00 • less -1,127.00 MA pays: $4,313.00 16

17. Income spenddown for single person in nursing home: • Income of Individual $2,000.40 • less Medicare Part B -96.40 • less personal needs allowance - 89.00 • less insurance premium -100.00 Income applied to care $1,715.00 • Cost of Care $5,440.00 • less -1,715.00 MA pays: $3,725.00 17

18. SPOUSAL IMPOVERISHMENT RULES

19. Allocation of Assets between spouses: Asset Assessment Date • First day of the first period of institutionalization of 30 days or more; OR • Where both have occurred, the later of: • The date of the most recent long-term care consultation; or • The receipt of home care services that would be covered by the EW or AC programs, are provided by a certified agency, and are received for 30+ days 19

20. Community Spouse Asset Allowance • CSAA = 1/2 of non-excluded assets on asset assessment date with a • Minimum of $31,094 and • Maximum of $109,560 • Allowable assets at time of MA application = CSAA + $3,000 20

21. Asset Assesment $35,000 • Protected assets: • CSAA $31,094 • MA limit $ 3,000 • Excess assets: $ 906 Date of MA application, if in 2010: $31,094 $3,000 21

22. Asset Assesment $100,000 • Protected assets: • CSAA $50,000 • MA limit $ 3,000 • Excess assets: $47,000 Date of MA application: $50,000 $3,000 22

23. Asset Assesment $220,000 • Protected assets: • CSAA $109,560 • MA limit $ 3,000 • Excess assets: $107,440 Date of MA application, if in 2010: $109,560 $3,000 23

24. Allocation of Income Between Spouses: Minimum income allowance for the community spouse • Standard of $1,823 per month • Increased by excess shelter allowance, up to cap of $2,739 • Shelter expenses include: • Mortgage or rent • Property taxes • Utilities (standards used) • Fire insurance • Association fee 24

25. Calculating the Minimum Monthly Income Allowance (MMIA) • Calculate the Shelter Expenses • Mortgage or rent, insurance, property taxes, utilities, association fee • Subtract $547 Excess Shelter Allowance • Add $1,823 to Excess Shelter Allowance to get MMIA, not to exceed $2,739. • Compare with CS’s income: If CS’s income is less than MMIA, CS receives allocation from LTC spouse’s income. 25

26. MA TRANSFER RULES 26

27. What is a transfer? • Gift • Sale • Reduction in ownership interest • Waiving the right to an inheritance or income • Refusing or failing to take action to obtain a PI settlement 27

28. Transfer rules, in general • Transfers of assets or income • For less than FMV • Within the “look-back period” (60 months for transfers into and out of certain trusts before 2/8/06, any transfers on or after 2/8/06 and gradually increasing to 60 months by 2/11) • Ineligible for LTC coverage for a specific period of time 28

29. Calculating the period of ineligibility • Divide the amount transferred by the Statewide Average Payment for Skilled Nursing Facility care (SAPSNF) • Use SAPSNF as of date of the application • Currently $5,006 from 7/1/09 through 6/30/10 29

30. Transfers on or after 2/8/06 • Look-back period of 60 monthsis being phased in – as of June 2010, the look-back is 52 months (add one month each month until February 2011.) • Period of ineligibility is calculated by dividing total assets transferred within 60 monthsby SAPSNF • Period of ineligibility begins: • For recipient: the month after the month of the transfer • For applicant: the month in which individual is receiving long-term care services, applies for MA, and would be eligible except for transfer 30

31. Transfers on or after 2/8/06 • There is no cap to the period of ineligibility • No minimum allowable transfer • Ineligibility begins when individual applies and is otherwise eligible 31

32. Services to which transfer penalty applies • During a PERIOD OF INELIGIBILITY, Medical Assistance will not cover “institutional care” • Nursing facility services • Level of care in any institution equivalent to nursing facility services • Home or community-based services including EW 32

33. Transfers: Presumption • Any transfer of assets or income is presumed to be for the purpose of establishing or maintaining MA eligibility • Applies to transfers by CS after MA eligibility established for LTC spouse 33

34. Paying a relative can be an uncompensated transfer • Payment for services by a relative is a transfer unless: • The parties have a notarized written agreement dated at or before time of service, requiring payment OR • Payment for services is made with sixty days of when services given 34

35. Allowable transfers of home • To spouse, disabled or blind child of any age, child under age 21 • To sibling with equity interest • To caretaker child (not grandchild) • For value • Denial would cause undue hardship 35

36. Other exceptions to transfer rules • To spouse at any time, or to third person for sole benefit of spouse • To disabled or blind child, or sole benefit trust • Transfer into trust for any disabled person under age 65 • Transfer of excluded assets other than homestead 36

37. Other exceptions to transfer rules (cont.) • All transferred assets have been returned • Partial return can reduce length of POI • Individual intended to dispose at FMV • Denial of eligibility would cause undue hardship 37

38. What if the county determines there is a period of ineligibility? • Client has the right to file an appeal of the decision; • Client can challenge the presumption that the transfer was for the purpose of obtaining or maintaining MA; AND • Client has the right to ask for a hardship waiver. 38

39. Liens • Medical Assistance lien against non-homestead real property • Notice of potential claim against life estate and joint tenancy interests

40. Elective share claim • Required for MA recipient whose spouse dies: not waivable after death. • Exception: “valid antenuptial agreement” allows spouse not to make elective share claim.

41. Estate recovery • County may place claim against estate for MA when: • Person was over 55 and received MA/AC. • Claim is against estate: • of recipient, if single • of surviving spouse, if married.

42. Estate recovery (cont.) • If claim is against estate of surviving spouse, claim applied to all assets owned by either or both spouses during marriage • Estate includes: • Probate assets • Non-probate assets: trusts, joint tenancy, POD and TOD accounts) • Life estate or joint tenancy interest in RE created on or after August 1, 2003

43. MSBA Elder Law Sectionwww2.mnbar.org/sections/elder-law The information in this presentation is current as of June 2010. This is an overview of very complex rules – specific program requirements may vary and should be analyzed before providing advice.