Plan To Be 100

The State has issued proposed policy changes to the Medicaid program, which, if adopted, would be effective October 1, 2102.  To review the proposed policy click here:  Proposed Medicaid Policy.

In terms of advising elderly clients seeking long term care Medicaid benefits, the interesting provisions of this proposed policy are:

1)      Married couples are allowed one year to transfer assets from the nursing home resident (Medicaid applicant) spouse to the community spouse (the so-called “presumed asset eligible period”).  If the new policy is adopted, BEM 402, page 4, will provide that at the end of that year, the Medicaid caseworker is to review each asset that was owned by the couple on the “snapshot date” date and determine if any divestment has occurred during this first year.  Planners need to advise their clients to be mindful of this review, and for the community spouse not to make gifts during that first year.  I believe the reference to the snapshot date (the “IAA”) is in error, because the snapshot date could be many years before the application date.  I suspect they meant (and will likely apply) the application date.  If this new policy is adopted, it will be interesting to see how the policy is applied when, during that first year, the community spouse dies and leaves his/her assets to children or other beneficiaries through testamentary instruments.

2)      A proposed change to BEM 546, page 3, clarifies that a married person on the MIChoice Waiver program can divert income to support the community spouse without divestment concerns.

3)      A proposed change to BEM 401, page 8, further clarifies that transfers to a pooled accounts trust (Exception B Trust) by a person over the age of 65, is divestment.

Also released were some immediately effective policy changes, which include a reference to Medicare Set Aside Agreements, and specifically that they are neither assets nor income for Medicaid eligibility purposes.  It is interesting that the policy specifically references only the use of MSAs in worker’s compensation settlements.