May 21, 2014
The impact of estate recovery regulations on the expanded Medicaid program has become an issue for many states—including Washington.
In 2004, Washington State extended its estate recovery policy to apply to all Medicaid services and associated costs for clients 55 and older. This applied to the program at the time.
However, more recent concerns have been raised about this policy since most individuals are now being covered under expanded Medicaid.
Under the expanded-Medicaid requirements, eligibility is determined based only on income, resulting in Modified Adjusted Gross Income (or MAGI) criteria.
Those individuals requiring long-term care still are covered by SSI-related regulations (applying to the aged, blind and disabled).
At issue has been whether individuals over age 55 who qualified for Medicaid as MAGI-eligible would be subject to the estate recovery policy.
The Health Care Authority (HCA) has announced that existing policy is to be amended to apply only to “enrollees 55 and older who are in…(long-term care) and have related prescription drug and hospital costs.” (HCA letter NR013-054, dated December 16, 2013).
It is possible for MAGI-qualified individuals to be eligible for long-term care services.
As noted by the Center for Medicare and Medicaid Services (CMS), individuals who are “medically frail or otherwise meet one of the benefit plan exceptions…must be offered the option of a benefit plan that includes Medicaid state plan services.” (CMS letter SMDL #14-001, dated February 21, 2014, citing 42 C.F.R. 440.315).
“Medically frail” individuals include those with “disabling mental disorders”, “serious and complex medical conditions”, or impairment of the “ability to perform one or more activities of daily living”. (42 C.F.R. 440.315).
CMS has concluded that “MAGI individuals who receive coverage for…(long-term care) may not have liens placed on their real property at this time….”
However, “states must…seek (estate) recovery…for (long-term care) for beneficiaries who were 55 years old or older when they received medical assistance….”
Thus, Washington is planning to adjust its estate recovery provisions to align with federal requirements. Estate recovery will apply in the same way to individuals over age 55 who are qualified for Medicaid as SSI-related (aged, blind or disabled) or as MAGI-eligible, and who receive long-term care services.
CMS has also concluded that restrictions on transfers of assets and gifting that apply to individuals qualified for long-term care under SSI-related rules also apply to those qualifying for long-term care under the MAGI rules.
It is clear that complexity is being experienced in the overlap area between Medicaid eligibility based on SSI-related criteria and eligibility based on MAGI criteria, for individuals requiring long-term care.
This situation reflects the failure by the Affordable Care Act (ACA) to realistically address long-term care issues.
Events to date seem to indicate that qualifying for long-term care continues to be seen as justifying more restrictive approaches to eligibility and estate recovery.
At the same time, qualifying for all other types of care is seen as needing to be liberalized and freed of as many regulations as possible.
More on Elder Law in Washington may be found in the “Elder Law” volumes of Washington Practice by Cheryl and Ferd Mitchell: Washington Elder Law and Practice (Vol. 26), the associated Elder Law Handbook (Vol. 26A), and the Washington Probate volume (Vol. 26B). These materials are available at www.store.westlaw.com.