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 the District of Columbia is named as the remainder beneficiary in the first position for at least the total amount of medical assistance paid on behalf of the annuitant; or • the District of Columbia is named as a remainder beneficiary in the second position after the community spouse or a disabled child and is named in the first position if the community spouse or the disabled child or the disabled child’s representative disposes of any remainder for less than fair market value.

The purchase of an annuity by or on behalf of an applicant for LTC will be considered a transfer of assets for less than fair market value unless:

 the annuity meets the Internal Revenue requirements of a 408(b) or (q) Individual Retirement Plan (IRA) under a qualified employer plan; or  the annuity is purchased with the proceeds from; o a 408(a) or (c) or (p) retirement account, o a 408(k) simplified employee pension, or o a 408A Roth IRA, or  The annuity is: o irrevocable, o non-assignable, o is actuarially sound, and o provides for payments in equal amounts during the term of the annuity with no deferral or balloon payments made.

PATIENT PAY AMOUNT (PPA) 2.14

After the assistance unit has been determined eligible for MA or eligible but over-income for MA, the LTC SSR must determine LTC payability by calculating the monthly amount the assistance unit must pay to the LTC facility toward the cost of care. This monthly amount is called the PPA. The PPA is determined by deducting the applicable LTC Income Allowances (see Section 2.6: LTC Income Allowances in this Chapter) from the total countable income of the assistance unit (see Section 2.15: Determining Total Countable Income for PPA Calculation in this Chapter).

The PPA is prorated for any month the individual enters the facility later than the first day of the month or leaves earlier than the last day of the month. When prorating the PPA, include the day admission occurred, but do not include the day discharge occurred.

If the assistance unit consists of a married couple residing in or entering the same facility, calculate two separate PPAs, one for the wife and one for the husband.

The individual or his/her authorized representative (see Section 1.6.2: Filing an Application/Accessing Benefits on Behalf of an Individual or Group in Part III) is responsible for submitting the PPA directly to the facility on a monthly basis. The Department pays the balance of the cost of care up to the established rate.

PPA and Spend-Downs 2.14.1

If the PPA is greater than the cost of care rate, eligibility for LTC coverage is conditionally denied as over- income until a six-month prospective spend-down liability is met. The conditionally-denied individual becomes a private-pay patient until s/he meets the six-month prospective spend-down liability. The liability is the sum of the PPAs for each of the six months in the prospective budget period.