Long-term Services and Supports Income and Asset Rules: Application With MAGI Eligible Medicaid Beneficiaries

Long-term Services and Supports Income and Asset Rules: Application With MAGI Eligible Medicaid Beneficiaries Backgrounder Eligibility for Medicaid s long-term services and supports i (LTSS) is limited to people who meet a state-designed assessment for functional need and certain financial standards. LTSS refers to a range of health and health-related services and supports that are needed by individuals over an extended period of time and are provided in the home or an institutional setting. Within broad federal standards, states determine if an individual meets the functional criteria by assessing limitations in an individual s ability to carry out activities of daily living (ADL) and instrumental activities of daily living (IADL). LTSS are paid by a variety of public and private sources, but public sources account for the majority (72.8 percent) of spending in recent years. Nearly half of the nation s $263 billion long-term care expenditures in 2010 were paid by Medicaid (GAO-12-749 Medicaid Long-Term Care). The financial eligibility criteria are based on an individuals assets income and resources together. The Medicaid statute requires states to use specific income and resource standards in determining eligibility: these standards differ based on whether an individual is married or single. Individuals can meet the Medicaid income and asset eligibility criteria in one of three ways: 1. They have income and assets equal to or below state-specified thresholds, 2. They deplete their income and assets on the cost of their care, thus spending down, or 3. They divest of their assets or transfer assets to meet these income and asset standards sooner than they otherwise might if they first had to spend their income and assets on the cost of their care. There are federal rules concerning Medicaid eligibility and the transfer of assets. Types of Assets and Examples Type of Assets Examples Income Money earned from work Money generated from resources, such as interest, dividends, and annuity payments a Money received from other sources, such as Social Security, worker s compensation, and unemployment benefits Resources Cash Bank accounts Stocks Bonds Trusts b Annuities Real Estate Vehicles (such as automobiles and boats) Life Insurance Source: GAO analysis of SSI Requirements a Some resources produce income. For example, an annuity is a financial instrument that provides income over a defined period of time for an initial payment of principal. The principal of an annuity may be considered a resource, while the payments it generates are considered income. b A trustee is any arrangement in which a grantor transfers property to a trustee with the intention that it be held, managed, or administered by the trustee for the benefit of the grantor or certain designated individuals.

Estate Recovery Other provisions in Medicaid seek to recover Medicaid costs through estate recover programs. Federal Medicaid Law requires states to recover from beneficiary estates any amounts paid for certain LTSS and other related services upon a beneficiary s death 1 Specifically, states are required to pursue the estates of: Individuals receiving services in a nursing facility or intermediate care facility 2 for the developmentally disabled (ICF/DD), regardless of age upon the sale of property subject to a lien, and Individuals aged 55 and older who received Medicaid assistance in nursing facilities, home and community-based services (HCBS), and related hospital and prescription drug services. 3 According to a Consumer Reports release Jan. 27, 2014, 10 states California, Colorado, Iowa, Massachusetts, Nevada, New Jersey, New York, North Dakota, Ohio, and Rhode Island plan to recoup some of the money spent on Medicaid enrollees 55 and older for basic health services after their death. The federal law provides states this option. The Omnibus Budget Reconciliation Act (OBRA) of 1993 Since the enactment of the Omnibus Budget Reconciliation Act (OBRA) of 1993, Medicaid s rules concerning eligibility, asset transfers, and estate recovery have been designed to restrict access to Medicaid s long-term services to those individuals who are within certain income parameters or have very high medical or long-term care expenses. Medicaid imposes stringent limits on income and assets of recipients, consistent with its mission to provide a health care safety net for the poor and for those whose personal resources are insufficient to pay the full cost of care. In order to fulfill this mission, Medicaid also recovers expenses paid on behalf of recipients from their estates under certain circumstances. OBRA 93 requires states to recover, at a minimum, all property and assets that pass from a deceased person to his or her heirs under state probate law, which governs both property conveyed by will and property of persons who die intestate. The State Medicaid Manual describes exemptions for certain property of American Indians and Alaskan Natives, as well as government reparations payments to individuals. See Section 3810.A.7. A state s ability to recover from probate estates depends in some measure on Medicaid s standing vis-à-vis other claimants. The order of payment of debt is established under state law. Mortgages, unpaid tax or public utility bills, child support arrears, burial costs, or other debts may be paid before the Medicaid lien and reduce the amount that is actually recovered. The state s standing is also influenced by locally determined state priorities. For example, some state laws protect the family home in an estate from some or all claims against it, including Medicaid claims. The Deficit Reduction Act (DRA) of 2005 In 2005, the DRA introduced new rules to strengthen provisions in Medicaid law that discourage the improper transfer of assets to gain Medicaid eligibility. Additional rules apply to Medicaid beneficiaries who require LTSS coverage. The DRA extended the look-back period, changes the beginning date of the penalty period, and provided 1 Section 1917(b) of the SSA describes estate recovery provisions. 2 Intermediate Care Facilities for individuals with Mental Retardation (ICF/MR) is an optional Medicaid benefit that enables States to provide comprehensive and individualized health care and rehabilitation services to individuals to promote their functional status and independence. Although it is an optional benefit, all States offer it, if only as an alternative to home and community-based services waivers for individuals at the ICF/MR level of care. 3 Congressional Research Service (CRS), Report 7-5700, Medicaid Financial Eligibility for Long-term Services and Supports, Kirsten J. Colello, April 24, 2014. 2

additional conditions on the application process for undue hardship waivers. The Act contained new provisions that altered review and verification of income procedures and imposed penalty periods. Consequently, if a state determines that an individual has transferred assets for less than fair market value (FMV), the individual may be ineligible for Medicaid coverage for LTSS during a penalty period. The penalty period is calculated by dividing the dollar amount of the assets transferred by the average monthly private-pay rate for nursing home care in the state (or the community, at the option of the state). 3

DRA Changes to Provisions Related to Transfers of Assets Topic Provisions prior to the DRA DRA provisions Look-back period 36 months for most assets, 60 months for transfers involving certain types of trusts, from the date the individual was institutionalized and applied for Medicaid 60 months for all assets, from the date the individual was institutionalized and applied for Medicaid a Beginning date of penalty period Approximately the date of the asset transfer b Generally, the later of (1) the first day of a month during or after an individual transfers assets for less than FMV or (2) the date on which the individual is eligible for Medicaid and would otherwise be receiving coverage for long-term care services, were it not for ineligibility due to the imposition of the penalty period Undue hardship Source: GAO analysis of the Social Security Act before and after the DRA Penalty period for asset transfers would not be applied if the state determines that the denial of eligibility would create an undue hardship as determined on the basis of criteria established by the Secretary of Health and Human Services (HHS) Undue hardship exists if application of the penalty period would deprive an individual of (1) medical care such that the individual s health or life would be endangered or (2) food, clothing, shelter, or other necessities of life c Allows the long-term care facility to apply for an undue hardship provision on behalf of a resident, with that resident s consent a The DRA provides that only transfers of assets made on or after February 8, 2006, are subject to the 60-month look-back period. Thus, transfers made prior to February 8, 2006, could result in a penalty period only if they occur within 36 months from the date an institutionalized person submitted an application. In contrast, transfers made on or after February 8, 2006, could result in a penalty period if they occur within 60 months of the date of application. Given this, as a practical matter, the look-back period will gradually increase from 36 to 60 months and will reach the full 60 months on February 8, 2011. b States had the option to begin the penalty period on either the first day of the month in which the asset was transferred for less than FMV or the first day of the month following the month of transfer. c The criteria for determining undue hardship are the same as those that had previously been established by the Secretary of HHS in Medicaid guidance, namely The State Medicaid Manual. 4

Provisions Introduced by the DRA Related to Medicaid Eligibility for Long-term Care and Asset Transfers DRA Provision Description Asset review and verification Annuities Continuing care retirement communities States are required to treat the purchase of an annuity as a transfer for less than FMV unless the annuity names the state as either (1) the remainder beneficiary in the first position for at least the total amount of Medicaid expenditures paid on behalf of the annuitant or (2) a remainder beneficiary in the second position after the community spouse or minor or disabled child. Annuities purchased by or on the behalf of an individual who applied for Medicaid coverage for long-term care shall be treated as a transfer of assets for less than FMV unless the annuity is irrevocable, nonassignable, actuarially sound, and provides for payments in equal amounts during the term of the annuity, with no deferral and no balloon payments. Annuities purchased by or on the behalf of an individual who applied for Medicaid coverage for long-term care services that are considered as individual retirement accounts or purchased with the proceeds of certain retirement accounts and meet certain federal tax code requirements are not considered transfers for less than FMV. States are required to consider certain entrance fees for continuing care retirement communities or life care communities as countable resources. Home equity Income-first rule Life estates Notes and loans Imposition of Penalty Period Imposition of partial months of ineligibility Treatment of multiple transfers Source: GAO analysis of the DRA. An individual with an equity interest in his/her home of more than $500,000 is excluded from eligibility for Medicaid payment for long-term care. (A state can elect to increase this value up to $750,000.) However, an individual would not be excluded from eligibility if his/her spouse, child under age 21, or child who is considered blind or disabled lives in the home. When calculating the community spouse s minimum needs allowance, states are required to allocate the available income of the institutionalized spouse before allocating any available resources to the community spouse. A purchase of a life estate interest in another person s home is treated as a transfer of assets for less than FMV unless the purchaser lived in the home for at least 1 year after the date of purchase. a States are required to consider funds used to purchase a promissory note, loan, or mortgage as a transfer of assets for less than FMV unless the repayment terms are actuarially sound, provide for payments to be made in equal amounts during the term of the loan with no deferral or balloon payments, and prohibit the cancellation of the balance upon the death of the lender. A state cannot round down or disregard any fractional period of ineligibility when determining the penalty period. For an individual or an individual s spouse who makes multiple fractional transfers of assets (i.e., transfers for less than FMV that are worth less than 1 month of nursing home cost of care) during the look-back period, states may determine the penalty period by treating the total, cumulative uncompensated value of all the assets transferred as one transfer. a A life interest, or life estate, is an interest in real property that gives the owner of the interest the right to use and possess the property only for the duration of the life of a person, usually the person who occupies the premises. 5

The Affordable Care Act (ACA) and the Application of Income and Asset Rules to MAGI Eligibles The ACA established a new simplified method for calculating income eligibility for Medicaid, Children s Health Insurance Program (CHIP) and financial assistance available through the health insurance marketplace based on what is called modified adjusted gross income (MAGI). Beginning Jan. 1, 2014, the methodology for determining income based on MAGI applied to both Medicaid and CHIP eligibility for most enrollees, including children, pregnant women, parents and other caretaker relatives and the new adult group (as applicable in a state) will apply in all states. Individuals whose Medicaid eligibility is determined using MAGI rules are not subject to an asset or resources test for purposes of determining Medicaid eligibility. However, a number of other statutory provisions are implicated when an individual seeks Medicaid coverage for LTSS. In response to state requests for clarification, the Center for Medicaid and CHIP Operations (CMCS) issued guidance (SMDL #14-001, ACA #29, http://www.medicaid.gov/federal-policy-guidance/downloads/smd-14-001.pdf ) concerning the application of asset counting rules, used in LTSS eligibility determinations, for individuals deemed Medicaid eligible under the new ACA methodologies who have requested LTSS. The guidance reemphasizes that people in the MAGI group will qualify for LTSS through one of multiple pathways, including services in a state s approved Alternative Benefit Package (ABP) or if an individual qualifies under the medically frail category. The following table describes existing rules and how they may apply to this population. 6

MEDICAID LONG TERM CARE SERVICES AND SUPPORTS (LTSS) TREATMENT OF LIENS, ADJUSTMENTS AND RECOVERIES, AND TRANSFER OF ASSETS 4 TOPIC MEDICAID LTSS TREATMENT OF MAGI 5 INDIVIDUALS Medicaid Liens Requires states to: impose liens on real property during the lifetime of a Medicaid enrollee who is permanently institutionalized, except when one of the following individuals resides in the home: the spouse, child under age 21, blind or disabled child of any age, or sibling who has an equity interest in the home and who has resided in the home for at least one year immediately before the date the individual become institutionalized; impose liens for Medicaid benefits incorrectly paid; and remove the lien when the Medicaid enrollee is discharged from the facility and returns home. A state can have a policy or rule not to pursue liens when a same-sex spouse or domestic partner of the Medicaid beneficiary continue to lawfully reside in the home 6. Prohibits the imposition of liens on the real property of MAGI individuals because current Medicaid rules which identify the categories of individuals who are subject to post-eligibility treatment of income (PETI) do not include MAGI individuals. 4 Transfers of Assets. Transferring assets for less than fair market value (FMV) is prohibited for purposes of establishing Medicaid eligibility. This prohibition applies when assets are transferred, sold, or gifted for less than they are worth by individuals receiving Medicaid Long Term Care Supports and Services (LTSSS) in long-term care facilities or by their spouses, or by someone else acting on their behalf. 5 Modified Adjusted Gross Income (MAGI) Modified adjusted gross income is the adjusted gross income on your federal income tax return plus any excluded foreign income, nontaxable Social Security benefits (including tier 1 railroad retirement benefits), and tax-exempt interest received or accrued during the taxable year. It does not include Supplemental Security Income (SSI). 45 CFR 155.320(c) specifies the requirements for verification of household income and family/household size as related to eligibility for insurance affordability programs. Section 155.320(c)(1) requires tax return data regarding MAGI and family size to be requested for all individuals whose income is counted in calculating a tax filer s household income and for whom the Exchange has an SSN. 6 Centers for Medicare and Medicaid Services (CMS) State Medicaid Director Letter, SMDL #11-006, June 10, 2011. 7

Estate Recovery Transfer of Assets Other Provisions Annuities Requires states to seek recovery of payments from an individual s estate, for individuals age 55 or older, for Medicaid long term care services and supports (LTSS). Prohibits states from recovery from the estate of a deceased Medicaid enrollee who is: (1) survived by a spouse; or (2) survived by a child under age 21 or a child of any age who is blind or disabled. Exemptions Allows states to exempt the following Medicaid long-term care beneficiaries from estate recovery, including individuals who the state has determined that recovery would: (1) impose an undue hardship 7 ; or (2) not be cost effective. Allows states to exempt individuals who have received benefits under a state-approved Long Term Care Insurance Partnership policy. Requires states to apply the transfer of asset provisions to institutionalized individuals, who are inpatients in a nursing facility or in a medical institution that is being paid based on a level of care received in a nursing home, or certain recipients of home and community-based services. Permits states to apply the provisions to non-institutionalized individuals. Applications for Medicaid coverage for LTSS must: (1) describe any interest an applicant or community spouse may have in an annuity, regardless of whether the annuity is irrevocable or treated as an asset; and (2) include a statement MAGI individuals who are 55 years old or older when they receive Medicaid LTSS are therefore not exempt from estate recovery provisions, unless they qualify for one of the existing exemptions. Asset and resource tests may not be applied when determining Medicaid eligibility under MAGI. Transfer of asset limitations do apply to coverage for certain services including Nursing facility services and other LTSS in circumstances where Medicaid applicants have transferred assets for less than fair market value. In addition, CMS has concluded that the transfer rules should apply to MAGI individuals who meet the definition of institutionalized individuals, and to non-institutionalized individuals, in states that have opted to apply the transfer rules to noninstitutionalized individuals. The rules imposed to these transactions are generally not limited to individuals in particular eligibility categories, and therefore states should apply the rules relating annuities to MAGI individuals in the same way as they 7 States are required to establish procedures for waiving estate recovery when recovery would cause an undue hardship. 8

that the state becomes a remainder beneficiary of an annuity purchased on or after enactment by virtue of the applicant s receipt of Medicaid assistance for LTSS. Requires states to treat the purchase of an annuity as a transfer for less than fair market value (FMV) unless the annuity names the state as either: (1) the remainder beneficiary in the first position for at least the total amount of Medicaid expenditures paid on behalf of the annuitant; or (2) a remainder beneficiary in the second position after the community spouse, or minor or disabled child (or in the first position if any of those individuals transfer the remainder of the annuity for less than FMV). Treats annuities purchased by or on the behalf of an individual who applied for Medicaid coverage for long-term care (LTC) as a transfer of assets for less than FMV unless the annuity is irrevocable, non-assignable, actuarially sound, and provides for payments in equal amounts during the term of the annuity, with no deferral and no balloon payments. Exceptions are applied to other individuals. Promissory Notes Life Estate Interests Annuities purchased by or on the behalf of an individual who applied for Medicaid coverage for LTSS services are not considered transfers for less than FMV if they are: (1) defined as individual retirement accounts under federal tax code; or (2) purchased with the proceeds of certain retirement accounts and meet certain federal tax code requirements. Requires states to consider funds used to purchase a promissory note, loan, or mortgage as a transfer of assets for less than FMV unless the repayment terms are: (1) actuarially sound; (2) provide for payments to be made in equal amounts during the term of the loan with no deferral or balloon payments; and (3) prohibit the cancellation of the balance upon the death of the lender. Requires states to consider a purchase of a life estate interest in another person s home as a transfer of assets for less than FMV unless the purchaser lived in the home for at least one year after the date of purchase. The rules imposed to these transactions are generally not limited to individuals in particular eligibility categories, and therefore states should apply the rules relating to promissory notes to MAGI individuals in the same way as they are applied to other individuals. The rules imposed to these transactions are generally not limited to individuals in particular eligibility categories, and therefore states should apply the rules relating to life estate interests to MAGI individuals in the same way as they are applied to other individuals. 9

Trusts Home Equity Rule Considers a trust an improper transfer of assets if it is established within the five-year look-back period. Trusts established prior to the five-year look-back period may be treated as improper transfers when the trust s payments to the individual are foreclosed during this time. Revocable Trusts Provides that any payments from the trust will be considered assets disposed of by the individual. Irrevocable Trusts Provides that payments that could be made, under any circumstances, to or for the benefit of the individual and any portion of the trust or income from which no payment under any circumstances could be made to the individual will be considered to be assets improperly disposed of by the individual. Provides that payments that could be made, under any circumstances, to or for the benefit of the individual and any portion of the trust or income from which no payment under any circumstances could be made to the individual will be considered to be assets improperly disposed of by the individual. Provides that an individual with an equity interest in his or her home of more than $543,000 in 2014 is excluded from eligibility for Medicaid LTSS unless his/her spouse, child under age 21, or child who is considered blind or disabled lives in the home. Permits states to elect to increase equity interest limit up to $814,000 in 2014. Requires the equity interest limit to be increased by the consumer price index (CPI) annually. Because the trust rules are not limited in their application to specific eligibility categories, states will have to confirm whether a MAGI individual requesting LTSS established a trust using his or her assets on or after the individual s look-back date, and evaluate the trust under existing rules. The rule related to the home equity are not limited in their application to specific eligibility categories, so therefore states must deny LTSS coverage to MAGI individuals whose home equity exceeds the limits for 2014, and thereafter. Continuing Care Retirement Communities (CCRC) CCRCs, typically provide a continuum of care ranging from independent residential living to nursing home care. Often CCRCs require an entrance deposit, which can be substantial. These entrance deposits typically are placed in an escrow account. Previously, these funds or deposits were excluded MAGI is not addressed. 10

Post-Eligibility Treatment of Income (PETI) 8 Spousal Impoverishment from a person s countable resources when determining Medicaid eligibility because they could not be accessed by the applicant. The DRA requires States to consider these funds as countable resources when determining eligibility for Medicaid, provided (1) the funds can be used to pay for care under the terms of the individual s contract with the facility should other resources of the individual be insufficient; (2) the entrance fee (or remaining portion) is refundable when the individual dies or elects to leave the CCRC; and (3) the entrance fee confers no ownership interest in the community. Requires state Medicaid agencies to reduce its cost using available beneficiary income for coverage LTSS provided to most Medicaid beneficiaries. State s costs are reduced generally by the amount of available income the Medicaid beneficiary has after deductions are made for their personal needs, the maintenance of the individual s spouse or family, and certain other expenses. Under the Medicaid spousal impoverishment provisions, a certain amount of the couple's combined resources is protected for the spouse living in the community. Depending on how much of his or her own income the community spouse actually has, a certain amount of income belonging to the spouse in the institution can also be set aside for the community spouse's use. 2014 SSI and Spousal Impoverishment Standards (http://www.medicaid.gov/medicaid-chip-program- Information/By-Topics/Eligibility/Downloads/Spousal- Impoverishment-2014.pdf ) CMS believes that the Medicaid statute provides them with the authority to expand the reach of the PETI rules to include MAGI individuals who receive coverage for LTSS. CMS is considering rulemaking on this issue. The Affordable Care Act (P.L. 111-148, Sec. 2104) extends existing spousal impoverishment protections to spouses of Medicaid beneficiaries who receive home and community-based services as well as institutional care. Effective Jan. 1, 2014 through Dec. 31, 2019. 8 The Post Eligibility Calculation is made to determine how much an individual in an institution (usually a nursing home) is able to contribute to cost of his/her own care. It applies only to individuals who are institutionalized (most commonly to those in nursing facilities) and to certain individuals receiving home and community based waiver services. The process only applies to those with income and only after their Medicaid eligibility has been established. The contribution is determined by first calculating the individual s total income and then deducting certain amounts from that income. Specifically, the individual s contribution is his or her total income less the following deductions (often referred to as protected amounts ): (1) personal needs allowance of at least $30; (2) A If there is a community spouse and the spousal impoverishment rules discussed above apply, a community spouse s monthly income allowance (at least $1,939 but not exceeding $2,931 for 2014), as long as the income is actually made available to the community spouse; (3) A family monthly income allowance, if there are other family members living in the household; and, (4) An amount for medical expenses incurred by the spouse who is in the medical facility. Once the above items are deducted from the institutionalized individual s income, any remaining income is contributed toward the cost of his or her care in the institution. 11

Mandatory Income First Rule The income first rule applies when determining whether to allocate additional resources to the community spouse to bring that spouse s income up to the minimum monthly maintenance needs allowance under the Medicaid spousal impoverishment provisions. The DRA requires States to first assume that all income that could be allocated from the institutionalized spouse to the community spouse has been allocated to that spouse before allocating any additional resources. More than half of the States already applied this rule before enactment of the DRA. MAGI is not addressed. 12

Glossary of Terms Annuity A contract in which an individual gives an insurance company money that is later distributed back to the person over time. Annuity contracts traditionally provide a guaranteed distribution of income over time, until the death of the person or persons named in the contract or until a final date, whichever comes first. Community-Based Services Services and service settings in the community, such as adult day services, home delivered meals, or transportation services. Often referred to as home- and community-based services, they are designed to help older people and people with disabilities stay in their homes as independently as possible. Countable Assets Assets whose value is counted in determining financial eligibility for Medicaid. They include: (1) Vehicles other than the one used primarily for transportation; (2) Life insurance with a face value over $1,500; and, (3) Bank accounts and trusts. Your home provided that your spouse or child does not live there and its equity value is greater than $500,000 ($750,000 in some states). Estate Recovery Process by which Medicaid recovers an amount of money from the estate of a person who received Medicaid. The amount Medicaid recovers cannot be greater than the amount it contributed to the person's medical care. Long-Term Care Facility (also called Long Nursing Home or Convalescent Care Facility) Licensed facility that provides general nursing care to those who are chronically ill or unable to take care of daily living needs. Long-Term Care Services Services that include medical and non-medical care for people with a chronic illness or disability. Long-term care helps meet health or personal needs. Most long-term care services assists people with Activities of Daily Living, such as dressing, bathing, and using the bathroom. Long-term care can be provided at home, in the community, or in a facility. For purposes of Medicaid eligibility and payment, long-term care services are those provided to an individual who requires a level of care equivalent to that received in a nursing facility. Look-Back Period Five-year period prior to a person's application for Medicaid payment of long-term care services. The Medicaid agency determines if any transfers of assets have taken place during that period that would disqualify the applicant from receiving Medicaid benefits for a period of time called the penalty period. Medicaid liens are based on the presumption that equity in certain property belonging to Medicaid recipients should be used to defray the owner s health care costs before the property can be transferred. 7 A lien, defined in the most general sense, establishes the State s right to make a claim against all real and personal property and other assets within the estate of Medicaid recipients after their death or the death of their spouse. Estate recovery law in some states (e.g., Rhode Island) says specifically that an individual applying for Medicaid who is 55 or older must be advised that: receipt of Medical Assistance may constitute a lien upon his or her estate. In its narrower definition, a lien is an encumbrance filed by the state Medicaid agency in land evidence records specifically against real estate property of living Medicaid recipients. Medically Frail An individual who has special medical needs and must at least include those individuals described in 42 CFR 438.50(d)(3) ii, children with serious emotional disturbances, individuals with disabling mental disorders, individuals with serious and complex medical conditions, and individuals with physical and or mental disabilities that significantly impair their ability to perform one or more activities of daily living. 13

Non-countable Assets (also called exempt assets) Assets whose value is not counted in determining financial eligibility for Medicaid. They include: (1) Personal belongings; (2) One vehicle; (3) Life insurance with a face value under $1,500; and, (4) Your home provided that your spouse or child lives there and its equity value is less than $500,000 ($750,000 in some states). Nursing Home (also called Long-Term Care Facility or Convalescent Care Facility) Licensed facility that provides general nursing care to those who are chronically ill or unable to take care of daily living needs. Supplemental Security Income (SSI) Program administered by the Social Security Administration that provides financial assistance to needy persons who are disabled or aged 65 or older. Many states provide Medicaid without further application to persons who are eligible for SSI. Transfer of Assets Giving away property for less than it is worth or for the sole purpose of becoming eligible for Medicaid. Transferring assets during the look back period results in disqualification for Medicaid payment of long-term care services for a penalty period. Resources Centers for Medicare and Medicaid Services (CMS), Application of Liens, Adjustments and Recoveries, Transfer-of-Asset Rules and Post- Eligibility Income Rules to MAGI Individuals, (SMDL #14-001; ACA #29; http://www.medicaid.gov/federal-policy- Guidance/Downloads/SMD-14-001.pdf ), Washington, D.C., Cindy Mann, Feb. 21, 2014. CMS, Same Sex Partners and Medicaid Liens, Transfers of Assets, and Estate Recovery, (SMDL# 11-006; http://downloads.cms.gov/cmsgov/archived-downloads/smdl/downloads/smd11-006.pdf ), Washington, D.C. Cindy Mann, June 10, 2011. CMS, IMPORTANT FACTS FOR STATE POLICYMAKERS: Deficit Reduction Act, (http://www.cms.gov/regulations-and- Guidance/Legislation/DeficitReductionAct/downloads/TOAbackgrounder.pdf ), Washington, D.C., Jan. 8, 2008. U.S. Government Accountability Office (GAO). MEDICAID LONG-TERM CARE: Few Transferred Assets before Applying for Nursing Home Coverage; Impact of Deficit Reduction Act on Eligibility Is Uncertain, (Publication #GAO-07-280; http://www.gao.gov/assets/260/257993.pdf), Washington, D.C., March 2007. GAO.MEDICAID LONG-TERM CARE: Information Obtained by States about Applicants Assets Varies and May Be Insufficient, (Publication #GAO-12-749; http://www.gao.gov/assets/600/593053.pdf ), Washington, D.C., July 2012. Congressional Research Service (CRS). MEDICAID COVERAGE FOR LONG-TERM CARE: Eligibility, Asset Transfers, and Estate Recovery, (Publication #RL33593; http://assets.opencrs.com/rpts/rl33593_20080131.pdf), Washington, D.C., Jan. 31, 2008. Julie Stone. Congressional Research Service (CRS). Long-Term Services and Supports: Overview and Financing, (Publication #R42345), Washington, D.C., Jan. 15, 2014. Kirsten J. Colello, and Scott R. Taglia. Prepared by: Joy Johnson Wilson, Health & Human Services Policy Director, and Rachel B. Morgan, RN, BSN, Health and Human Services Committee Director 14