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Effective: June 1, 2011 |
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19.35.10ar7 - MA Excess Assets (Archive) |
Archived: October 1, 2011 |
This manual section provides information on acceptable ways that clients can reduce excess countable assets in order to qualify for MA benefits.
Time Period for Reducing Assets.
Eligibility Request for Application Month.
MA Eligibility for Retroactive Months.
MA Eligibility for Retroactive Months When Excess Assets Have Been Spent.
Enrollees Requesting MA Payment of LTC Services.
Time Period for Reducing Assets.
Acceptable Ways to Reduce Assets.
Time Period for Reducing Assets
Applicants with excess countable assets in the month of application, or in any retroactive months for which coverage is requested, must reduce those assets by the end of the processing period to be eligible for health care benefits.
Send a notice to applicants who have excess countable assets informing them they are over the asset limit and must reduce assets prior to the end of the processing period. Failure to reduce assets prior to the end of the processing period results in program ineligibility.
Exception: Pend applicants who are unable to reduce excess countable assets due to circumstances that are beyond their control.
Example:
Steve applies for health care on December 10. He has assets in excess of the allowable asset limit. He received the notice of excess assets, but on January 23 he reports that he has been hospitalized and is not able to reduce his assets until the following week when he will be discharged.
Action:
Extend the processing period allowing time for Steve to reduce his assets. On February 2, Steve sends verification that he has reduced assets. Steve is now within the asset limit.
Eligibility Request for Application Month
Acceptable ways to reduce excess countable assets for applicants requesting eligibility in the month of application include, but are not limited to:
l Purchasing excluded household or personal items for any household member.
l Purchasing other excluded items, such as a vehicle or burial funds if these items are not already part of the household.
l Purchasing burial services for household members.
l Paying bills or other obligations.
Applicants for MA-EPD or CAC, CADI, TBI, and DD waiver clients may reduce assets by giving them to a spouse without a transfer penalty.
Note: Applicants requesting long-term care services may experience penalties if they make uncompensated transfers. See Transfers for further details about uncompensated transfers.
Applicants must verify that they have reduced excess countable assets by providing bank statements or other documents that show current asset amounts, but are not required to provide receipts. Determine if the client has reduced assets appropriately or if an uncompensated transfer has occurred.
MA: Eligibility can begin back to the first day of the month of application if the applicant reduces excess assets within the applicable processing period and no uncompensated transfers occur.
Example:
Robin applied for health care on January 19 for herself and her three children. She has excess countable assets and must reduce her assets by the end of the processing period to become eligible. On February 3, Robin submits documentation showing that she has reduced her assets. Her countable asset total is now less than the asset limit.
Action:
Approve eligibility for Robin’s three children because there is no asset limit for children. Even though Robin did not reduce her assets until February 3, her eligibility will begin January 1 because she reduced her assets during the applicable processing period and no uncompensated transfers occurred.
MA Eligibility for Retroactive Months
Applicants with excess countable assets who request MA coverage for any of the three months before the month of the application may reduce excess countable assets using the following two ways:
1. Retroactively designate or purchase burial funds up to $1,500 if they have not already done so. See Burial Related Expenses for more information.
The purchased burial funds cannot be for:
n burial space items,
n additional burial fund services,
n cash advance items included in an irrevocable burial agreement
n an insurance- or annuity-funded burial agreement.
Note: Applicants who designate funds for burial, rather than purchase a burial fund, are required to verify the designation by a signed and dated statement.
Example:
Lourdes applies for health care and requests two months retroactive eligibility. She is $1,000 over the asset limit. Lourdes does not have a burial fund. To reduce assets for the retroactive months, Lourdes places $1,000 in a separate savings account and designates that account for burial funds.
Action:
Request a signed statement from Lourdes indicating the $1,000 in the new savings account is designated as her burial fund.
2. Apply the excess countable assets on net medical bills incurred in the retroactive months.
The bills can be incurred by:
n The applicant.
n The applicant’s spouse, regardless of whether the spouse is living in the household.
n Dependent children under age 18 regardless of whether they live in the household.
n Children under age 21 who live in the household.
Start the reduction by subtracting the amount of the oldest medical bill incurred in the retroactive period.
MA eligibility begins on the date that excess countable assets have been reduced. Medical bills beginning with the next dollar after assets have been reduced are eligible for payment.
Verify payment of medical bills from the retroactive period. Verification may include bank statements, receipts or confirmation from the provider.
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 has a $200 clinic bill for October 2 and was hospitalized on October 5.
Action:
Thomas reduces his assets by paying the $200 clinic bill and the first $300 of the hospital bill and provides receipts for those payments. Approve Thomas’ eligibility to begin October 1. MA will begin paying his medical expenses beginning with the first dollar after the $500, so will pay the amount of his hospital bill beginning with $301.
MA Eligibility for Retroactive Months When Excess Assets Have Been Spent
This information applies to MA, including applicants for Medicare Savings Programs (MSP).
Applicants requesting retroactive MA coverage who already spent their excess countable assets in ways other than the two listed above may choose to:
1. Become eligible for health care benefits on the day after their excess countable assets are within the asset limits.
2. Use other remaining assets to reduce the countable asset total to within the asset limit by one of the two acceptable methods.
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:
l Request eligibility to begin on January 9, the day after the excess assets were reduced to within the asset limit.
l Designate or purchase a burial fund of $1,500.
l Pay the first $1,500 of medical bills incurred in January.
Example:
Caroline applied for health care on June 1, requesting retroactive 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 reduce her assets in an acceptable manner.
Action:
Caroline may either:
l Request eligibility to begin on April 6, which is the day the excess assets were reduced to within the asset limit.
l Have her granddaughter return all or part of the transferred money to allow Caroline to reduce her excess assets in an acceptable manner.
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 has no other outstanding medical bills. She has a designated burial fund of $1,500.
Action:
Leslie is not eligible for retroactive coverage for more than one month because she cannot reduce assets in an acceptable manner. She already has $1,500 designated to a burial fund and her medical bills are not high enough to use all of her excess assets.
For eligibility in the application month, Leslie must first reduce her excess assets in a way that will not result in an uncompensated transfer, such as by purchasing excluded household items or other excluded assets or by paying medical bills or other obligations.
Note: Medical bills used to reduce assets cannot be applied toward an income spenddown.
For more information on coding MMIS see the MMIS User Manual.
Enrollees Requesting MA payment of LTC services
An MA enrollee may be asset eligible for Basic MA but have excess assets for MA payment of LTC services due to attributing assets from the community spouse. Follow the policy described in the asset assessment section of the HCPM regarding how an enrollee can reduce excess assets when requesting MA payment of LTC services and the timeline for when the reduction must occur.
Time Period for Reducing Assets
Excess countable assets are a barrier to ongoing eligibility. Enrollees must receive timely notice when closing a case for excess assets, which includes information regarding acceptable ways to reduce assets in order to maintain eligibility.
Eligibility continues if an enrollee reduces excess countable assets before the effective date of closing.
Close MA if an enrollee does not reduce excess countable assets by the effective date of closure.
Exception: Allow the following exceptions as long as the enrollee reduces excess countable assets by the time of the next renewal:
l Interest retained beyond the month in which it is accrued.
l Clothing and personal needs allowance beyond the month of receipt (applicable to people using long-term care budgeting only).
Acceptable Ways to Reduce Assets
Acceptable ways for an enrollee to reduce assets include, but are not limited to:
1. Purchasing excluded household or personal items for any household member.
2. Paying bills or other obligations.
3. Purchasing another type of excluded asset, such as a vehicle.
4. 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).
5. Purchasing services for household members.
6. Enrollees in MA-EPD or CAC, CADI, TBI, and DD waiver clients may reduce assets by giving them to a spouse without a transfer penalty.
Enrollees must verify that they have reduced excess countable assets by providing bank statements or other documents that show current asset amounts, but are not required to provide receipts.
Example:
Hilda is an MA enrollee. She reports and verifies assets of $2,000 in excess of her asset limit on her March renewal being processed in February.
Action:
Add information to the closing notice explaining how Hilda can reduce her assets. Hilda must reduce her excess assets before March 1 to continue her eligibility.
On February 26, Hilda submits bank statements verifying that her assets are now below the asset limit. She lists the following expenditures:
l She paid $1,400 for property taxes due on her home.
l She had her carpet cleaned for $300.
l She purchased a new TV for $300.
Action:
Hilda has reduced her assets before the March 1 closure date. Her eligibility continues.
When an MA-EPD enrollee stops working for any reason, continue to apply the MA-EPD asset rules and $20,000 asset limit when determining basic MA eligibility for up to 12 months after the person loses MA-EPD status.
Note: This does not apply to MA-EPD enrollees who lose MA-EPD eligibility when they turn age 65. Apply the standard Method B asset guidelines for the month after the enrollee turns age 65. Close MA-EPD with 10-day notice for the end of the month in which MA-EPD clients turn age 65.