MC # 6 (07/07)

STATE OF ALASKA

Department of Health and Social Services

Division of Public Assistance

Date: July 27, 2007

Subject: Aged, Disabled and Long Term Care Medicaid Manual Change #6

This manual change implements new transfer of asset policies. It also adds a new resource policy for an individual whose equity interest in a home exceeds $500,000. This is Individualized Supports a result from the Deficit Reduction Act ( DRA Deficit Reduction Act of 2005 ) of 2005, which was signed into law February 8, 2006. These policies are effective for all Medicaid applications and reviews received on or after August 1, 2007, and for any new discovery of transfer of assets for less than fair market value. These policy changes affect individuals applying for or receiving Medicaid long term care or home and community based waiver services.

This manual change also implements new policy resulting from a change in state law that increases the resource limit for the Working Disabled Buy-In program to $10,000 for an individual and $15,000 for a couple.

A description of these changes is included in the overview below. If you have any questions, please contact any member of the Policy and Program Development Team at 465-3347 or email dpapolicy@health.state.ak.us

OVERVIEW OF CHANGES

MS 524-G - Institutionalized Individuals with Substantial Home Equity

New subsection. Adds Medicaid exception to APA Adult Public Assistance policy regarding the exemption of an individual’s home for long-term care services.

MS 524-H - Promissory Notes, Loans, and Property Agreements for Institutionalized Individuals

New subsection. For transfer of asset purposes only, adds Medicaid exception to APA Adult Public Assistance policy regarding the treatment of promissory notes, loans, and property agreements for long-term care services.

MS 524-I - Purchase of Life Estates for Institutionalized Individuals

New subsection. For transfer of asset purposes only, adds Medicaid exception to APA Adult Public Assistance policy regarding the treatment of life estates for long-term care services.

MS 524-J - Resource Limit for the Working Disabled Buy-In Category

New subsection. For the Working Disabled Buy-In category only, adds resource exception to the APA Adult Public Assistance policy regarding the resource limit.

MS 534 - Working Disabled Buy-In

Adds new policy that increases the resource limit for the Working Disabled Buy-In program to $10,000 for an individual, or $15,000 for a couple.

MS 553-C Substantial Home Equity

New subsection. Adds new policy that an individual is not eligible for long-term care services if the individual’s equity interest in the individual’s home exceeds $500,000. This policy does not apply if a spouse, child under 21, or disabled child of any age is living in the home.

MS 554 - Transfer of Assets

Updated section with new transfer of asset policies:

Lengthens look-back period from 3 years (36 months) to 5 years (60 months) for individuals applying for long term care services, including home and community-based waivers. The look-back period is lengthened from the 36-months prior to the month of application to 60-months prior to the month of application. This will be phased-in over a 5-year period from the date of enactment, which is February 8, 2006.

Changes the beginning date for a transfer of asset penalty for transfers for less than fair market value after February 8, 2006. The penalty period begins on the date of application or the time of transfer, whichever is later.

Clarifies when the transfer of the home to an adult child will not result in a transfer of asset penalty.

Adds a new subsection on non-allowable transfers.

Adds new policy on when the purchase of promissory notes and loans are not considered a transfer.

Adds new policy on when the purchase of life estates is considered a transfer.

Adds new policy on when the purchase of an annuity is an allowable transfer.

Requires an individual (including the individual’s spouse) to disclose any interest in an annuity.

Adds new policy on partial month penalties and examples showing the calculation for the remainder amount of penalty period.

Adds e-mail contacts for the Division of Senior and Disabilities Services and the Division of Health Care Services and describes information that must be provided to those agencies when a transfer of asset penalty is imposed.

Clarifies policy on undue hardship determinations.

Allows a long term care facility to file an undue hardship request on behalf of the individual with consent of the individual or personal representative.

Addendum 6 - Medicare Part D Low Income Subsidy Guide

Removes SeniorCare Prescription Drug Coverage

UPDATED FORMS

The following forms have been revised to comply with the new transfer of asset requirements:

Med 3 - Declaration Denial of Asset Transfer Form; and

Med 4 - Application for Adults and Children with Long Term Care Needs.

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