Medical Assistance for Long-Term Care Services

2.4.1.2 Long-Term Care Home Equity Limit

People who request or renew Medical Assistance for Long-Term Care Services (MA-LTC) and own a home must have an equity interest in their home that is at or below the applicable home equity limit to be eligible for MA-LTC. The amount of the home equity limit is indexed annually based on the percentage increase in the consumer price index for all urban consumers.

Home equity is the fair market value (FMV) less any encumbrances. A person’s home equity interest must be verified each time a person requests or renews MA-LTC unless an exception applies.

Definition of Home for Home Equity Limit

A home is defined for the home equity limit as the primary dwelling a person owns in whole or in part, and in which he or she lives or lived immediately prior to receiving LTC services. A home includes the primary dwelling, all surrounding land and any building on that land, provided the land is not separated from the dwelling by property owned by another person. Land separated from the dwelling by a public right-of-way is included in the definition of the home.

Home equity is determined by subtracting the encumbrances on the home from the person's interest in the market value of the home.

See Agricultural Homestead to evaluate a home located on agricultural land.

Verification Requirements

The fair market value (FMV) or estimated market value (EMV) of a person’s home must be verified at the time the home equity limit is applied. If the FMV or EMV is greater than the applicable home equity limit, then encumbrances must also be verified to determine the home equity interest.

The county, tribal or state agency verifies the EMV through the county assessor’s website. The person must provide verification of the FMV if the information cannot be obtained from the county assessor’s website or the person disputes the EMV.

People who dispute the EMV must provide real estate appraisal as the verification.

FMV or EMV may be found on the following:

A real estate tax statement
A statement from the county property tax appraiser
An estimate of value from a licensed real estate appraiser

Encumbrances may be one of the following:

Mortgages
Contracts for deed
Mechanic’s liens
Home equity loans
Other legally binding debts that are secured on the home

Application of the Home Equity Limit Policy

The home equity limit does not apply in the following situations:

Dependent relative lives in the home. The home equity limit does not apply if a dependent relative of the person lives in the person’s home. For purposes of the home equity limit policy, dependent relatives include:
- Spouse
- Children of the person or the person’s spouse who are either:
  - Under 21 years of age
  - Of any age and who are blind or permanently and totally disabled
A demonstrated home equity limit hardship exists. The home equity limit does not apply when an imminent threat to a person’s health and well-being exists if MA-LTC is denied.

The home equity limit does apply:

When a request for MA-LTC is made after a break in LTC services, regardless of when the first request for payment was made
At annual renewal for enrollees approved for MA-LTC
When an exception no longer applies

Agricultural Homestead

An agricultural homestead is property located on agricultural land that meets the definition of "home" and includes the dwelling, the garage, if any, and one acre of land immediately surrounding the dwelling.

A determination of whether a home is considered an agricultural homestead is only needed when the person’s home equity interest is determined to be greater than the home equity limit.

The equity value of an agricultural homestead is determined by subtracting the verified encumbrances from the EMV listed on the property tax records. The EMV listed on the property tax records is used, rather than the FMV, for agricultural homesteads. Tax records verify that the homestead qualifies as an agricultural homestead.

If any farm buildings or structures are located on the agricultural homestead, the market value of those structures are not included in the value of the agricultural homestead.

Waiver of Home Equity Limit for Demonstrated Hardship

A demonstrated home equity limit hardship is an imminent threat to a person’s health and well-being if MA-LTC is denied. A hardship is demonstrated by supporting documentation provided by the person or the person’s authorized representative. Documentation of a hardship is evaluated on a case-by-case basis.

Requests for a waiver of the home equity limit based on hardship must be made in writing by either the person or the person’s representative.

Verification of Hardship

The person must provide documentation showing that there are no other resources available to pay for LTC services and one of the following conditions apply:

At least two financial institutions have turned down the person’s application for a reverse mortgage or home equity loan.
The person is a joint owner of a home and one or more joint owners refuse to apply for a reverse mortgage or home equity loan in a joint application with the person.
- A hardship is not demonstrated if the person’s spouse is the only joint owner refusing to apply for a reverse mortgage or home equity loan.
There is a legal barrier to the sale of the person’s ownership interest in the home or to the approval of a reverse mortgage or home equity loan.

Hardship Waiver Decision

The facts and documentation provided by the person or the person’s authorized representative must be reviewed to determine whether a waiver of the home equity limit should be granted.

A decision must be provided within 30 days of the written request if all necessary information has been provided.
An extension may be granted if more time is needed to provide the documentation.
Written notice of the decision using the Notice of Action for Payment of LTC Services (DHS-4915) is required to be sent to the person and, if applicable, the authorized representative.

Legal Citations

Minnesota Statutes, section 256B.056, subdivision 2a

United States Code, title 42, section 1396p, subdivision (f)