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Effective: January 1, 2007 |
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19.55.10ar1 - Applying Home Equity Limit (Archive) |
Archived: September 1, 2008 |
The home equity limit is applied only in specific situations and at certain times. This section provides the policy requirements on when or when not to apply the home equity limit.
For home equity limit processing steps, see LTC Home Equity Limit.
Do not request information or review the home equity limit at the following times:
l When an exception is met.
l Six-month renewals.
l When an increase in home equity is reported at a time other than the annual renewal.
Apply the home equity limit at the following times:
l At the time a request for MA payment of LTC services is made, if the request:
n Was made on or after July 1, 2006.
n Is made after a break in LTC services regardless of when the first request of payment was made.
l At annual renewal:
n If the initial request for MA payment of LTC services was made on or after January 1, 2006.
n If the initial request was before January 1, 2006, but there has been a break in LTC services.
l At the time:
n An exception ends or begins.
n Proof that the home equity has been reduced to $500,000 or below.
Example:
Louis enters a LTC facility on October 18, 2006. He applies for MA, including MA payment of LTC services, on the same day and requests three months of retroactive coverage. He owns his own home and lives alone. He has a home equity of $300,000.
Action:
Apply the home equity limit when determining Louis’ eligibility for MA payment of LTC services as of October first. Louis’ home equity is below the limit. If he meets all other eligibility criteria he is eligible for MA payment of LTC services.
Do not apply the limit when determining his regular MA eligibility, including the three months of retro coverage.
Example:
Katie is applying for MA on November 5, 2006 and is approved for the Elderly Waiver (EW). She lives in her own home with an equity value of $600,000.
Action:
Katie is applying for MA payment of LTC services because she wants MA to pay for her EW services. Although her home is excluded as her homestead, the home equity limit must still be applied. Katie’s equity is above the equity limit. She is ineligible for MA payment of LTC services.
Example:
Paul applied for MA payment of LTC services on June 22, 2006. He began to receive MA payment of those services as of August 1, 2006 due to a short transfer penalty. His annual renewal is due in August 2007.
Action:
Apply the limit at his annual renewal in August 2007 and at each annual renewal thereafter.
Do not apply the home equity limit to Paul’s eligibility for payment of LTC services at the time he applies for payment of those services or at his six-month renewal in January 2007.
Example:
Joan was determined ineligible for MA payment of LTC services on September 16, 2006 because her home equity was above $500,000, however she continued to be eligible for payment of all non-LTC MA covered services.
On December 20 Joan submits evidence showing her home equity was reduced to $480,000 on November 22. She is requesting MA payment of LTC services retroactively to October 1.
Action:
Joan is ineligible for MA payment of LTC services for the month of October because her home’s equity was above the limit. However, she is eligible for MA payment of LTC services beginning November 1, if she meets all other eligibility criteria, because her home equity was verified as being below the home equity limit.
Example:
Herb is an MA enrollee receiving Elderly Waiver services since July 2006. He currently lives in his home with his wife. On August 10 Herb’s wife dies.
Action:
Herb met an exception to the home equity limit at the time of his request for MA payment of LTC services Herb because his wife lived in the home.
At the time of his wife’s death, the home equity limit must be applied because Herb no longer meets an exception.
Note: Even though Herb lives in the home, and the real property (homestead) is excluded as a counted asset, the home equity limit must be applied.