|
Effective: January 1, 2011 |
|
|
19.55ar4 - Long-term Care (LTC) Home Equity Limit (Archive) |
Archived: April 1, 2012 |
People who request or renew MA payment of long-term care (LTC) services 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 payment of LTC services. A person’s home equity interest must be verified each time a person requests or renews MA payment of LTC services unless an exception applies.
Steps to Applying the Home Equity Limit.
Beginning in 2011, the home equity limit will increase annually based on the Consumer Price Index for All Urban Consumers (CPI-U).
The fair market value (FMV) or estimated market value (EMV) of an applicant's or enrollee'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.
See Agricultural Homestead to evaluate a home located on agricultural land.
Note: Real estate appraisals will generally refer to a home’s fair market value (FMV), while tax statements generally refer to estimated market value (EMV). Either FMV or EMV may be used for purposes of the home equity limit policy.
Check the county assessor’s website to determine the EMV of a client's home. Request verification from the client if the EMV cannot be obtained from the county assessor's website.
Steps to Applying the Home Equity Limit
Complete the following steps for people requesting or renewing MA payment of LTC services:
1. Determine if the Home Equity Limit is a condition of eligibility. Review policy provided in Applying the Home Equity Limit.
Continue to Step 2 if a review is required.
2. Compare the client's interest in the reported FMV or EMV of the home to the applicable home equity limit. If the client's interest in the FMV or EMV is:
l Equal to or less than the applicable limit, and the FMV or EMV has not been verified, request verification if it is unavailable through the county assessor’s office.
l Equal to or less than the applicable limit, and the FMV or EMV is verified, the client is eligible if all other eligibility criteria are met.
l Greater than the applicable limit, request verification of the home's FMV or EMV and all encumbrances against the home if not already received. Continue to Step 3 when verifications are provided.
3. Determine the client's equity value based on the client’s ownership interest in the home.
Note: If the client’s home equity interest is located on agricultural land and the client's equity interest in the home is greater than the applicable home equity limit, determine the client's agricultural homestead equity value. See Agricultural Homestead for more information.
4. Compare the client's home equity interest to the home equity limit of $500,000. If the client's equity interest is:
l Equal to or less than the applicable limit, the client is eligible for MA payment of LTC services if all other eligibility criteria are met.
l Greater than the applicable limit, the client is ineligible for MA payment of LTC services.
n Deny eligibility for MA payment of LTC services for applicants requesting payment of these services.
n For enrollees, close MA payment of LTC services, with 10-day notice.
n Update MMIS to prohibit MA payment of LTC services. See the MMIS User Manual (RLVA) for instructions.
n Do not deny or close MA for non-LTC services if all other eligibility criteria are met.
Clients may request a hardship waiver when MA payment of LTC services is denied or closed due to the home equity limit.
These steps are also available on the Home Equity Limit Analysis Section.
Follow the notification requirements when denying or closing a client due to having a home equity interest in excess of the applicable home equity limit.