Month: January 2017

Well, the discussion of the 2016 changes to Ohio Medicaid’s rules continues.

The initial installment (April 28, 2016) provided an overview of the transition from the old system (following section 209(b) of the federal Medicaid law) to the new system (that will follow section 1634 of the federal Medicaid law.)  The May 5, 2016 installment discussed the new income rules that will go into effect with the new eligibility system.  The May 12, 2016 installment discussed setting up a Qualified Income Trust (aka Miller Trust) that will be necessary for people who need ABD Medicaid to help pay for long term care.  The June 16, 2016 installment discussed the Ohio rules that describe how to use the Miller Trust each month.  The June 23, 2016installment discussed the difficulty in understanding the need for a Miller Trust.  The July 1, 2016 installment discussed the need to empty the Miller Trust account every month.  The July 7, 2016 installment discussed the need to balance the Miller Trust with the desire to have health insurance.  The July 15, 2016 installment discussed the confusing deposit rules for Miller Trusts.  The July 21, 2016 installment discussed the changes that the Ohio Department of Medicaid made to the form Miller Trust document.  The July 28, 2016 installment discussed whether income is supposed to go directly into the Miller Trust.  The August 4, 2016 installment discussed Medicaid’s insistence that the transfers (or deposits) into the Miller Trust account be automatic.  The August 11, 2016 installment discussed money that doesn’t actually reach the Medicaid-recipient that, nonetheless, counts as “income” for purposes of using a Miller Trust.  The August 18, 2016 installment discussed  the appearance that a person on long term care Medicaid has an increase in income when he/she stops paying Medicare premiums.  The August 25, 2016 installment discussed the impact of tax withholding on certain income sources and the difficulty that the tax withholding creates for the Miller Trust.  The September 2, 2016 installment discussed the limit placed on monthly costs of the Miller Trust.  The September 9, 2016 installment discussed how Ohio’s Medicaid rules appear to count income tax refunds twice.  The September 15, 2016 installment discussed the Ohio Department of Medicaid’s change in policy regarding real estate (other than the residence.)  The September 22, 2016 installment discussed keeping the house with an intent to return to home.  The September 29, 2016 installment discussed keeping the house while a dependent family member lives there.   The October 6, 2016 installment discussed the home that is co-owned by someone else (other than the spouse.)  The October 27, 2015 installment discussed real property that is “essential for self-support.”  The November 10, 2017 installment discussed the retirement funds belonging to the spouse who does not seek Medicaid’s help with long term care costs.  The November 17, 2016 installment discussed the 2016 changes in how Ohio Medicaid will allow applicants to give away some of their assets cover the resulting penalty period through a return of part of the assets.  The December 1, 2016 installment discussed Ohio Medicaid’s new prohibition on using promissory notes to recover from an applicant giving away assets.   The December 8, 2016 installment discussed the possibility of using a Special Needs Trust to recover from assets given away creating a Medicaid penalty period.  The December 15, 2016 installment discussed the use of short-term annuities to recover from a long term care Medicaid penalty period that results from giving away assets.  The December 22, 2016 installment discussed the end of the monthly “spend-down” to achieve income eligibility for the type of Medicaid that substitutes for health insurance.  The January 12, 2017 installment followed up the September 15, 2016 installment on a 2016 change to how Medicaid views real estate holdings with a discussion of a December 30, 2016 state hearing decision.  Following up on the , today’s installment will discuss what appears to be a shift in policy by Ohio Medicaid on the applicant’s “intent to return” home.

Note on real estate:  Before the rule changes, Medicaid treated the home differently than it treated other real estate.  Now, after the rule changes, Medicaid still treats the home differently than it treats other real estate.  However, neither the home nor other real estate is treated the same way now as it was before the rule changes.

If the applicant still lives in the home, its value is not counted toward the applicant’s financial eligibility for Medicaid.  Likewise, if the applicant’s spouse or dependent child lives in the home, its value is not counted.  These policies regarding home occupancy by the applicant or spouse have not changed during 2016.

Now, however, occupancy by other family members who are dependent on the applicant for support also keeps the house out of the eligibility determination.  This is new and a result of the new rules.

If the applicant is not in the house and the house is not occupied by the spouse or a dependent family member, the house’s value is counted toward the applicant’s financial eligibility unless the applicant intends to return home.  This is also new and also a result of the new rules.  BUT, there seems to have been a switch in the interpretation of the “intent to return” in just the few months since the August 1, 2016 rule change.

Right after the rule change, county Medicaid officials explained that an applicant listing a house for sale shows that he/she does not intend to return and the house’s value should be counted in the eligibility determination.  At the time that Medicaid explained its policy that putting a house up for sale showed an intent NOT to return, certain elder law attorneys explained that the applicant may need to move to a more suitable house.  (For example, a smaller, one floor house with a larger bathroom and open space under the kitchen counters may be easier to navigate for someone who now needs a walker or a wheelchair.)   A more navigable house would, after all, make it easier for the Medicaid applicant to return home.  Nonetheless, the county officials explained that planning to move to a different house isn’t actually a “return,” so the house’s value is counted in the eligibility determination.

Now, in a recent public meeting, county Medicaid officials have expressed a change of heart on how it views an applicant’s plan to “return” home but to a “different home.”   Now, Medicaid no longer automatically concludes that putting a house up for sale shows an intent not to return.  Ohio Medicaid has apparently concluded that making it easier to allow a person receiving long term care to move out of a nursing home or assisted living into a home of his/her own could be a good thing.

After all, most people want to stay in their own homes.  Living at home, even if one receives long term care, has certain emotional benefits for some people.  It also allows Medicaid to pay for care without also paying for housing.

Assuming that the position expressed by this county official in fact reflects the state policy, it’s a move to make the application process for long term care Medicaid and, even more, the location where one receives the care itself, more favorable to the person.

I thought I had finished the discussion of the changes to Ohio Medicaid’s Aged, Blind and Disabled program for 2016-2017 with my installment on December 22, 2016.  A recent ruling in an administrative appeal, however, might reverse one of the August 1, 2016 rule changes.

The initial installment (April 28, 2016) provided an overview of the transition from the old system (following section 209(b) of the federal Medicaid law) to the new system (that will follow section 1634 of the federal Medicaid law.)  The May 5, 2016 installment discussed the new income rules that will go into effect with the new eligibility system.  The May 12, 2016 installment discussed setting up a Qualified Income Trust (aka Miller Trust) that will be necessary for people who need ABD Medicaid to help pay for long term care.  The June 16, 2016 installment discussed the Ohio rules that describe how to use the Miller Trust each month.  The June 23, 2016installment discussed the difficulty in understanding the need for a Miller Trust.  The July 1, 2016 installment discussed the need to empty the Miller Trust account every month.  The July 7, 2016 installment discussed the need to balance the Miller Trust with the desire to have health insurance.  The July 15, 2016 installment discussed the confusing deposit rules for Miller Trusts.  The July 21, 2016 installment discussed the changes that the Ohio Department of Medicaid made to the form Miller Trust document.  The July 28, 2016 installment discussed whether income is supposed to go directly into the Miller Trust.  The August 4, 2016 installment discussed Medicaid’s insistence that the transfers (or deposits) into the Miller Trust account be automatic.  The August 11, 2016 installment discussed money that doesn’t actually reach the Medicaid-recipient that, nonetheless, counts as “income” for purposes of using a Miller Trust.  The August 18, 2016 installment discussed  the appearance that a person on long term care Medicaid has an increase in income when he/she stops paying Medicare premiums.  The August 25, 2016 installment discussed the impact of tax withholding on certain income sources and the difficulty that the tax withholding creates for the Miller Trust.  The September 2, 2016 installment discussed the limit placed on monthly costs of the Miller Trust.  The September 9, 2016 installment discussed how Ohio’s Medicaid rules appear to count income tax refunds twice.  The September 15, 2016 installment discussed the Ohio Department of Medicaid’s change in policy regarding real estate (other than the residence.)  The September 22, 2016 installment discussed keeping the house with an intent to return to home.  The September 29, 2016 installment discussed keeping the house while a dependent family member lives there.   The October 6, 2016 installment discussed the home that is co-owned by someone else (other than the spouse.)  The October 27, 2015 installment discussed real property that is “essential for self-support.”  The November 10, 2017 installment discussed the retirement funds belonging to the spouse who does not seek Medicaid’s help with long term care costs.  The November 17, 2016 installment discussed the 2016 changes in how Ohio Medicaid will allow applicants to give away some of their assets cover the resulting penalty period through a return of part of the assets.  The December 1, 2016 installment discussed Ohio Medicaid’s new prohibition on using promissory notes to recover from an applicant giving away assets.   The December 8, 2016 installment discussed the possibility of using a Special Needs Trust to recover from assets given away creating a Medicaid penalty period.  The December 15, 2016 installment discussed the use of short-term annuities to recover from a long term care Medicaid penalty period that results from giving away assets.  The December 22, 2016 installment discussed the end of the monthly “spend-down” to achieve income eligibility for the type of Medicaid that substitutes for health insurance.  Today’s installment will follow up the September 15, 2016 installment on a 2016 change to how Medicaid views real estate holdings with a discussion of a recent state hearing decision.

Appeal number 3148728, in a decision dated December 30, 2016, resolved a conflict between one of the 2016 changes and a longstanding Medicaid eligibility concept regarding “availability” of the applicant’s “resources.”  (Remember, Medicaid calls “resources” what most of the rest of the world calls “assets” or “life savings.”)

The 2016 rule change at issue was the repeal of Ohio Administrative Code section 5160:1-3-05.15 which provided that real property was exempt from the resource calculation for a Medicaid recipient/applicant if the property was up for sale through a broker or agent.  When that rule was rescinded, elder law attorneys concluded that the Ohio Department of Medicaid wanted to make the ownership of real estate a bar to eligibility to long term care Medicaid even if the applicant was trying to sell the real property.

The resource “availability” test for counting resources is set forth in Ohio Administrative Code 5160:1-3-05.1(B)(7), the definition of “resources.”  This rule defines “resources” as “cash, other liquid asset, personal property, and real property an individual and/or the individual’s spouse has an ownership interest in, has the legal ability to access in order to convert to cash (if not already cash), and is not legally prohibited from using for support and maintenance.”  The language from this rule that is important to our discussion is “has the legal ability to access in order to convert to cash.”

In the application that led to the December 30, 2016 state hearing decision, the applicant had listed three parcels of real property for sale in June 2016, two to three months before applying for Medicaid on August 29, 2016.  The initial asking price for the real properties was the value as listed in the county’s property tax records.  After some time passed with no sales (but before the Medicaid application,) the seller reduced the asking price for each parcel.  The state hearing decision ruled that, because the properties had not been sold despite the attempts to do so, they were not “available resources” because they could not be converted into cash.

As a result, the applicant was able to get Medicaid coverage for long term care despite continued ownership three parcels of real property.  This result seems directly to contravene the apparent intent of rescinding Ohio Administrative Code section 5160:1-3-05.15.

Now, the state hearing decision is rather brief.  It is not clear whether the same result would have been reached if the real properties would have been listed for sale for a time period shorter than the two to three months.  Likewise, it is not clear whether the same result would have been reached if the asking prices had not been reduced.  (The initial asking prices set at the county appraised value was important because any higher asking price would be viewed as an attempt to avoid a sale.)

Similarly, Ohio Medicaid has a spotty history in recognizing the precedential value of state hearing decisions in later applications, so this individual decision may not lead to other similar decisions.

Nonetheless, the first case that looked at the conflict between the new real property rules and the “availability” requirement was decided in favor of the Medicaid applicant.  It’s a good sign.