Betsy Abramson Disability Rights Wisconsin August 2009

1. Betsy Abramson Disability Rights Wisconsin August 2009 FINANCIAL ELIGIBILITYFINANCIAL ELIGIBILITY FOR WISCONSIN’S LONG TERM CARE PROGRAMS WISCONSIN’S LONG TERM CARE PROGRAMS

2. Medicaid Eligibility Handbook • http://www.emhandbooks.wi.gov/meh-ebd/ • Ch. 15 – Income • Ch. 16 – Assets • Ch. 17 – Divestment • Ch. 18 – Spousal Impoverishment • Ch. 28 – Home and Community-Based Waivers • Ch. 29 – Family Care Long-Term Care

3. General Medicaid Eligibility≠ Medicaid Waiver Eligibility • Different income limits. Three different sets: Category A, Category B, and Category C • Asset limits • If have a spouse who is not applying for waivers or in an institution, “spousal impoverishment” protections available  • NOTE: Estate Recovery applies.

4. INCOME LIMITS: Category A • SSI, SSI-E, Section 1619 benefits, widow/widower’s benefits, “503” cases and disabled adult children. • NOTE: Automatically $ eligible for COP-Waiver •  No cost-share liability towards cost of services.

5. INCOME LIMITS: Category B Special income limit of 300% of federal SSI benefit rate. $674 X 3 = $2,022 per month in 2009. May have a cost-share. Depends on income deductions and allowances, medical/remedial expenses, and whether a “spousal impoverishment” situation

6. INCOME LIMITS: Category C Income above the $2,022/month but Many many Income deductions and medical/remedial expenses bring down their “countable income” below current “medially needy” MA income limit: $591.67 EXAMPLE: Individual with $2,422 month has spenddown of: $2,422.00 - $591.67 = $1,830.33 per month The spenddown is their cost-share.

7. What is Unearned Income? 1/2 • Income from Trusts • Sick Benefits • Unemployment Compensation • Retirement Benefits • General Relief and Charity • Gifts • Land Contract • Loans • Interest Income …..and…..

8. What is Unearned Income? 2/2 • Social Security Benefits • Lump Sum Payment • Money for School • Child Support • Profit-Sharing • Income Received by Member of Religious Order • Federal Match Grants for Refugees • Gambling Winnings • Payments to Native Americans

9. INCOME EXEMPTIONS • Major Exemptions: • First $20 disregarded • Part of wages: • Only counts: [(Total Monthly Wages – $65) / 2] = Wage amount counted • Example: If wages = $465/month, then: [($465 – $65) / 2] = only $200 counts • Many others: Some examples: Adoption, Agent orange, Combat…..Kinship….Payments to Nazi Victims…..Susan Walker Payments…VA Allowances….W2 Payments, American Recovery and Reinvestment Act of 2009.

10. ASSETS • Limits: $2,000 for individual $3,000 for couple if both applying If only one spouse applying: See: Spousal Impoverishment

11. EXEMPT ASSETS – Examples: (These don’t count against the limit) • Primary residence  up to $750,000 equity • One auto,  if used for transportation by applicant or household member • Personal possessions and home furnishings  • Wedding and engagement rings • Equipment used for self-support • Life Insurance up to $1,500; otherwise… • Term insurance in any amount (no cash value) • Burial – see next

12. EXEMPT ASSETS Burial Assets: • Up to $3,000 in irrevocable burial trust • Interest can also be made irrevocable and thus exempt • Pre-paid burial spaces in any amount Plots, caskets, values, crypts, mausoleums, urns, niches, headstones, plaques, opening/closing arrangements. And for other family members! • $1,500 separately identifiable revocable burial fund. If so, offsets funds permitted in IBT. • Life-insurance funded burial arrangements

13. Divestment • Giving away or transferring non-exempt assets, or the home in some situations, for less than FMV. • Lookback period: FIVE YEARS • Penalty Period: Starts when assets otherwise spent down. • Ex.: • Giving grandchildren large gifts at b-days, holidays? • Giving money to adult kids for downpayment? • Paying for a kid’s wedding? • Contributing to grandkids’ college? • Bailing adult kids out of debt, trouble?

14. Divestment: Lots of specific rules • Annuities… • Life estates… • Promissory Notes, Loans or Mortgages… • Partial Month Divestments… • Partial Refunds… • CCRC entrance fees • Intent* • Undue Hardship* *See next slides

15. “Intent” to Divest? Not divestment if can prove: • Had made other arrangements to provide for LTC • Life expectancy at transfer was less than 5 years • No expectation of LTC needed for next 5 years • Had pattern of charitable giving or to family members (prior to look-back period) AND annual gifts less than 15% of gross income. • Ffor educational or vocational goals of family • Is support of dependent relatives living with them

16. Divestment: Undue Hardship • Penalty period waived if imposition deprives individual of: • Medical care such that health or life would be endangered; or • Food, clothing, shelter or other necessities of life • Generally must request within 20 days of notice • Special Required Documentation • Notice of discharge from facility or • Costs of needed LTC services compared to income and assets

17. Divestment: WARNING! • Complicated • Significant potential consequences • Client should get good legal advice from experienced knowledgeable counselor

18. Spousal Impoverishment • Old days (pre-1989): Spouse without LTC needs went broke, too. • Now: protects income and assets of spouse who: - is not in institution - not on COP/CIP/ FC, etc. • Only for legally married spouses. Not partners. Not adult kids.

19. Spousal Impoverishment Assets • Don’t count exempt assets. • Then, regardless of “name on title”

20. Practice Examples

21. Spousal Impoverishment – Income • Non-MA spouse keeps ALL income in own name • Can get allocation from MA spouse’s income to bring “her” income up to lower of: $2,739 or $2,428.33 plus excess shelter allowance • Excess Shelter Allowance: amount above $728 for mortgage/rent, taxes, maintenance fees and utility allowance

22. Example: George and Laura • George on Family Care; Laura not • George’s income: $ 845 Social Security $ 1200 Pension $ 1000 Monthly speaker’s fees TOTAL: $2045/month Laura’s income $ 600 Social Security $ 400 Librarian pension = TOTAL $1,000/month Mortgage and utilities are $1,228

23. Laura’s allocation • ESE is $1,228 - $728 = $500 • Laura gets some of George’s income, to BRING HER UP to lesser of: $2,739 or [$2,428.33 + $500] so, $2,739 • George’s: $2,045 - $45 for him= $2,000 available • George can allocate to Laura $1,739: Now Laura has: $1,739 + her $1,000 = $2,739 • Note! If George didn’t have $1,739, State doesn’t subsidize.

24. Estate Recovery and Liens Applies to benefits rec’d in • All ages: NHs since 10/91 • Inpatient hospital benefits after 7/95 if “institutionalized recipients” • Age 55+: Skilled nursing, home health aide, therapies, private duty nursing, personal care (since 4/2000) • Waiver (COP, CIP, Brain Injury, FC) since 2/2000

25. Methods of Recovery • Happens after death of recipient • ONLY AFTER DEATH • Claims in Probate Estates • Liens on homes

26. When no recovery or lien • If is a surviving spouse • If a surviving disabled child • If surviving minor child • If surviving blind child

27. Estate Recovery After: • Cost of administering the estate • Funeral Costs • Costs of last illness

28. Heirs Can Keep: • Decedent’s wearing apparel and jewelry • Household furniture, furnishings and appliances • Other tangible personal property under $3,000 – not cash of $3,000

29. Waivers of Claim: Undue Hardship • Heir or beneficiary would become eligible or remain eligible for SSI, FS, AFDC, MA • Estate contains real estate used as part of heir or beneficiary’s business • Heir or beneficiary is receiving general relief or veterans benefits based on need.

30. Liens • On homes, but NOT PLACED on home of a recipient in community • NOT PLACED ON HOME OF RECIPIENT IN COMMUNITY !!! • Prior notification required • Only if recipient not reasonably expected to return home and if none of these in home: • Certain caregiving adult child at least 24 months before • Sibling who continuously lived there at least 12 months before admission

31. Examples • Fred and Wilma • Will and Grace • Homer and Bart