EPIC NEWS
Florida's DCF has scheduled a Workshop to address proposed Florida rule
changes to implement the Deficit Reduction Act 2005.
The Department of Children and Family Services published a required notice
in the
Florida Administrative Weekly (Vol 32, Number 38, Page 4411),
announcing the agency's intent to amend Rule 65A-1.712, to be consistent
with new federal regulations regarding the transfer of assets and the
treatment of assets.
The purpose of the amendment and proposed rule is to "revise Medicaid
policies in accordance with federal law, the Deficit Reduction Act (DRA) of
2005." According to DCF, the DRA "provides for reform in the treatment
of assets in the institutional Medicaid eligibility determination."
The Workshop will be held October 9, 2006 at 3:00pm, at 1317 Winewood
Boulevard, Building 3, Room 455, Tallahassee, FL 32399
Today, the U.S. District Court for the District of Columbia issued an order
dismissing Public Citizen v. Clerk, U.S. District Court for the District
of Columbia. Public Citizen filed suit to challenge the
constitutionality of the Deficit Reduction Act of 2005 because the House of
Representatives passed a different version of the bill than that which was
signed into law by the president. The court’s decision relied on
Marshall Field v. Clark, an 1892 case addressing whether congressional
journals could be used to demonstrate that a bill did not pass Congress.
Public Citizen has announced plans to appeal.
****Click HERE
to read the Court's Opinion Dismissing the DRA Lawsuit****
Today the Centers for Medicare & Medicaid Services (a part of the US
Department of Health & Human Services) issued a detailed set of Guidelines
to the State Medicaid Directors around the country. As expected, CMS
has indicated that the legislative changes to transfer of assets in Medicaid
planning are effective as of February 8, 2006, particularly those provisions
dealing with annuities and gifting plans.
****Click
HERE for the CMS Letter dated July 27, 2006.****
****Click
HERE for the CMS State Guidelines****
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On
February 1st, the United States House of
Representatives passed Senate Bill 1932, the Deficit
Reduction Act of 2005. A week later, on February
8th, President Bush signed the Bill into law.
This change in the law represents the most
significant change in Medicaid eligibility since
1988.
The Deficit Reduction Act of 2005 ("DRA")
dramatically changes Medicaid eligibility rules.
The obvious purpose of this law is to make it harder
for people to receive Medicaid benefits for nursing
home, assisted living and other long-term care. The
bill is effective as of February 8, 2006.
Under the DRA,
people who make gifts, even small ones, will now be
made ineligible for Medicaid. Under the old law,
people who made gifts were penalized beginning when
they made the gift. Now, the penalty begins when the
person applies for Medicaid. Since you cannot apply
for Medicaid with more than $2,000, it is unclear
how these people will pay for nursing home care.
The new law imposes other changes:
Change in "Look-Back period:"
The new law imposes a five-year "look-back" period
on all gifts. This means that if people give money
away, the Medicaid applicant will be disqualified if
they apply within five years of the last gift. The
old law provided for a three-year look-back in most
cases.
Change in Penalty Start-Date:
Under the old law, if a person made a gift, they
would be disqualified for Medicaid beginning the
date the gift was made. Under the new law, the
penalty will not start until the person applies for
Medicaid and are broke.
Annuities-Government is New Beneficiary:
The DRA requires the government to be the
beneficiary on certain annuities. If the family is
named as beneficiary, the new law can result in
denial of Medicaid benefits.
Spouses Can't Keep as Much Money.
The new
law imposes an "Income-First Rule" on the spouses of
Medicaid applicants. This rule allows the government
to count the income of both spouses to prevent an
at-home spouse from keeping more of their assets
before the other spouse can qualify for Medicaid.
Mortgages and Notes are Assets.
Under the DRA, the State will be able to disqualify
people from achieving Medicaid eligibility based on
ownership of mortgages or notes.
Homes can now be "taken" by the government.
For the first time ever, the government will count
homes as an asset for Medicaid eligibility. Homes
over $500,000 in value are at risk.
There are things that people can do to protect
themselves. With proper legal planning, people can
still avoid impoverishment at the cost of long-term
care. One challenge is just getting the word
out so that people do not inadvertently disqualify
themselves for Medicaid.
***Click Here to read the text of
the Deficit Reduction Act of 2005***
***Click Here to read Section
1396p, incorporating the DRA,
compiled by
Tim Takacs |
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On March __, 2006, a bill was filed in the Florida Senate (Senate Bill
2532), that appears to address the implementation of the federal Deficit
Reduction Act of 2005 in Florida.
The bill explicitly sets implementation dates and addresses many of the same
issues found in the DRA. However, the Senate Bill goes further.
Of particular interest are the provisions concerning Personal Service
Contracts. The bill would impose several significant limitations on
lifetime contracts for the care of a nursing home resident, which are often
used in the Medicaid planning context. For example, the bill would
prevent the contract from covering personal services already provided by a
nursing home, and would prevent compensation for services normally provided
by family members in love and affection.
You can view the bill at the following link:
***SENATE
BILL 2532***
Elder Law attorneys in Florida are debating the impact
of Feldman vs DCF, a First District Court of
Appeals case involving a medicaid planning technique
known as Spousal Refusal or "Just Say No".
With spousal refusal, the at-home spouse puts all assets
into his or her own name, and then refuses to make those
assets available for the care of the spouse in the
nursing home. The at-home spouse must certify this
fact, and the nursing home spouse must assign all rights
of spousal support to the State.
In the Feldman case, the joint assets of the
couple were transferred to the at-home spouse after the
medicaid application was filed. The State DCAF
took the position that a post-application transfer of
assets was not permitted and resulted in ineligibility
for medicaid. The Court agreed with the DCAF.
However, the tone of the Court's opinion suggests the
judges dislike the entire idea of spousal refusal,
regardless of the timing of the transfer. The
holding of Feldman does not address the issue of
pre-application transfers, but elder law practitioners
have been holding their breath since the ruling came
out.
Within the past week, multiple elder law attorneys have
indicated that spousal refusal cases have been denied
outright by caseworkers citing the Feldman decision.
This is happening even in cases where all transfers
between spouses occurred prior to medicaid application.
While none of these cases have yet been appealed, the
future of spousal refusal in Florida remains uncertain.
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