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Effective: December 1, 2006 |
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19.35.10ar1 - MA and GAMC Excess Assets (Archive) |
Archived: October 1, 2008 |
The following manual section provides information on MA/GAMC clients whose asset total is above their asset limit. Policy differs by health care program and by applicants and enrollees.
General MA, GAMC and GHO Provisions.
Time Period for Reducing Assets.
Eligibility Request for Application Month.
Eligibility Request for Retroactive Months.
Excess Assets and Income Spenddown.
Time Period for Reducing Assets.
Acceptable Ways to Reduce Assets.
General MA, GAMC and GHO Provisions
If an MA applicant/enrollee has excess assets, excess income and an improper transfer, apply the transfer penalty first, then reduce assets and then complete an income spenddown.
If a GAMC applicant/enrollee has excess assets and an improper transfer, apply transfer provisions first and then reduce assets.
Note: GHO does not have transfer or spenddown provisions.
Time Period for Reducing Assets
Applicants who have excess assets in the month of application, or in any of the retroactive months in which they are requesting eligibility, must reduce those assets by the end of their processing period to be eligible.
l The application can be pended beyond the processing period if applicants are unable to complete the reduction because of circumstances beyond their control.
l Do not deny the application for excess assets before the end of the processing period.
Example:
Steve, age 67, applies for health care on December 10. The worker reviews the application on December 17. Steve has excess assets.
Action:
The worker sends Steve a notice regarding the excess assets and indicates he may be eligible if he reduces his assets.
Steve has not completed the reduction as of January 15. The worker sends a reminder notice advising Steve that he must reduce the assets by January 25 or the application will be denied for excess assets.
Action:
Steve contacts his worker on January 23 and reports that he has been hospitalized and does not have the ability to reduce his assets until the following week when he will be discharged. The worker extends the processing period allowing time for Steve to reduce his assets.
Steve sends in verification that he has reduced assets on February 2nd.
Action:
Steve is now asset eligible.
Eligibility Request for Application Month
Applicants requesting health care to begin with the month of application may reduce excess assets in any way that does not result in an improper transfer.
l Eligibility can begin back to the first of the month of application if the applicant reduces assets within the allowable time frame.
Example:
Robin applies for health care on January 19 for herself and her three children. She is determined to have excess assets and must reduce them by the end of the processing period. Robin verifies that she has reduced her assets on February 3. Her asset total is now less than the asset limit.
Action:
Her eligibility will begin January 1.
l Acceptable ways to reduce assets for applicants requesting eligibility for the month of application and beyond include, but are not limited to:
n Purchasing excluded household or personal items for any household member.
n Using the excess to purchase another type of excluded asset, such as a vehicle or burial funds if the household does not already have them.
n Paying bills or other obligations.
n Purchasing burial services for household members.
n Repaying MA or GAMC received.
Note: The county agency may not require enrollees to reduce in this manner.
n CAC, CADI, TBI, DD waivers and MA-EPD only: Reduction of assets can be completed by giving assets to a spouse.
l Verify that assets have been reduced by bank statements or other means. Do not require receipts.
l Determine if the reductions is a proper or improper transfer.
Eligibility Request for Retroactive Months
Applicants requesting MA for any of the three months before the month of application, who had excess assets in those months may reduce excess assets in two ways. They can:
l Retroactively designate, or purchase, burial funds up to $1,500 per person.
n The purchased burial fund cannot be for burial space items or additional burial fund services or cash advance items included in an irrevocable burial agreement or an insurance- or annuity-funded burial agreement.
n Applicants who do not reside in a long-term care facility (LTCF) or receive services through the Elderly Waiver (EW) may retroactively designate burial funds for:
m The applicant.
m The applicant’s spouse (regardless of whether the spouse is health care eligible).
m Any health care eligible dependent child .
n Applicants who reside in a LTCF or who receive services through EW may retroactively designate burial funds up to $1500 for:
m Self.
m A community spouse.
m Health care eligible dependent children living with the community spouse.
n For applicants who set aside funds for burial, rather than purchase, a signed and dated statement is required.
Example:
Lourdes applies for health care and requests two months retro eligibility. She has $1,000 of excess assets which she continues to own into the application month. Lourdes decides to move $1,200 from her savings account into another savings account.
Action:
The worker requests Lourdes signs a statement indicating the $1,200 in the new savings account is designated for burial.
l Apply the excess on net medical bills incurred in the retro months.
n The bills can be incurred by:
m The applicant.
m The applicant’s spouse, whether in the household or not.
m Children under age 18 regardless whether in the household or not.
n Start the reduction with the oldest net bill in the retroactive period.
n MA eligibility begins with the next dollar of medical bills in the retroactive period after excess assets are reduced incurred.
n Verify that assets have been reduced by bank statements or other means.
n Verify that the medical bills have been paid.
Example:
Thomas applied for health care on January 1. He is requesting three months of retroactive eligibility. On October 1 he owned excess assets of $500 and continues to own the same assets. He was hospitalized on October 5, and also has a $200 clinic bill for October 2.
Action:
Thomas may reduce assets by either:
m Establishing a burial fund of $500 or more, up to $1,500, if he has not already designated or purchased a burial. Thomas must verify that he has reduced the assets. He would be asset eligible as of October 1.
m Paying the $200 clinic bill and the first $300 of his hospital bill. He must verify that he has actually paid those medical bills. Thomas would be asset eligible on October 5, and his medical expenses would begin being paid on the $301 of the hospital bill.
If applicants spend excess assets in any way other than the two methods allowed for retroactive coverage, retro coverage may be limited or unavailable. There are two options for client’s who have already spent the excess assets:
l The applicant can choose to become eligible on the day after the assets were reduced to within the limits.
l The applicant may use other remaining assets to properly reduce the asset total to within the asset limit in one of the two acceptable methods.
Example:
Joan applies for health care and requests three months of retroactive eligibility. She has two children in her household. Joan’s eligibility determination has found her to have $2000 in excess assets in the retro months. She is below the asset limit for the application month.
Action:
Joan may either:
m Spend an additional $2000 of her current assets by designating to or purchasing a burial fund.
m Decide to have eligibility begin the day after her asset total was within the asset limit.
m Spending $2,000 on the oldest medical bills incurred during the retroactive months.
Example:
Marvin applied for health care on April 1 and requested retroactive coverage back to January 1. On January 1 he had excess assets of $1,000. On January 8 he used $1,000 of his assets to purchase a stereo. He has not used any of his $1,500 Burial Fund Exclusion (BFE).
Action:
Marvin may either:
m Use $1,000 of his remaining assets to properly reduce assets by designating to the BFE.
m Pay $1,000 of his remaining assets on the first $1,000 of medical bills incurred in January.
m Request eligibility to begin on January 9, the day after assets were improperly reduced.
Example:
Caroline applied for health care on June 1, requesting retro coverage back to April 1. On April 1 she had excess assets of $4,000. On April 5 she transferred $4,000 to her granddaughter. Caroline does not have sufficient remaining assets to properly reduce the excess.
Action:
Caroline may either:
m Request eligibility to being April 6.
m Have her granddaughter return all or part of the transferred money to allow Caroline to reduce properly. The amount she has returned depends on the amount of assets Caroline does have. If Caroline had $3,000 in remaining assets, she could have her granddaughter return $1,000 and reduce the entire $4,000 excess by designating a $1,500 Burial Fund Exclusion and applying the rest to the oldest medical bills in April.
Example:
Leslie applied for health care on April 1 requesting one month of retroactive coverage. She had excess assets of $4,000 on March 1, which she continued to own in April. Her March medical bills totaled $1,000. She had no other outstanding medical bills. She has already designated $1,500 to the Burial Fund Exclusion.
Action:
Retroactive coverage is not possible for Leslie because she cannot properly reduce assets by paying retro medical expenses and she has already used her burial exclusion.
For eligibility in the application month, Leslie will have to reduce her assets in any way that is not improper. She may pay the retro medical bill, pay other debts or purchase items.
Excess Assets and Income Spenddown
Medical bills used to reduce assets cannot be applied toward an income spenddown.
For more information on how to code the MAXIS system see TE09.16. For more information on coding MMIS see the MMIS User Manual.
Follow MA Applicants sub sections Time Period for Reducing Assets and Eligibility Request for Application Month.
There is no retroactive eligibility for GAMC or GHO.
Time Period for Reducing Assets
Excess assets are a barrier to ongoing eligibility. It is important to give an enrollee timely notice when closing a case for excess assets, which includes information regarding acceptable ways to reduce assets in order to maintain eligibility in the notice.
If an enrollee reduces excess assets before the effective date of closing, eligibility continues.
If an enrollee does not reduce assets before the effective date of closure, close MA unless the excess assets are due to any of the following listed below. Allow these exceptions as long as the enrollee reduces the excess assets at the time of the next renewal.
l Interest retained beyond the month accrued.
l For people using long term care budgeting, retaining the clothing and personal needs allowance beyond the month of receipt.
Acceptable Ways to Reduce Assets
An enrollee may reduce assets in any manner that does not result in an improper transfer. Examples of acceptable ways for an enrollee to reduce assets include but are not limited to:
l Purchasing excluded household or personal items for any household member.
l Paying bills or other obligations.
l Purchasing another type of excluded asset, such as a vehicle.
l Designating or purchasing burial funds if the household does not already have them.
n The client may purchase additional insurance-funded burials, annuity-funded burials, or irrevocable burial agreements for burial space items or services not previously funded.
n The client may designate liquid assets to the Burial Fund Exclusion (BFE).
l Purchasing services for household members.
l Repaying MA or GAMC received.
n The county agency may not require enrollees to reduce in this manner.
n Be sure to inform people of other acceptable ways to reduce the excess.
l MA-EPD, CAC, CADI, TBI, DD waiver only: Can reduce assets by giving assets to the spouse.
Example:
Hilda is an MA enrollee. She reports and verifies assets of $2000 in excess of her asset limit on her March renewal being processed in February.
Action:
A closure notice for March 1 is sent along with information on how to reduce her excess assets. Hilda must reduce her excess assets before March 1 to continue her eligibility.
On February 26, Hilda submits bank statements verifying that assets are now below the asset limit. She lists her expenditures as the following:
l She paid $1,500 for property taxes due on her home.
l She had her carpet cleaned and it cost $300.
l She purchased a new TV for $300.
Action:
Hilda has reduced her assets before the March 1 closure date. Her eligibility continues.
Verify that assets have been reduced through bank statements or other means.
Ask the enrollee to list expenditures made to reduce the excess if necessary to ensure that no improper transfer has occurred.
Do not require receipts.