Florida Elder Law Blog - ElderLawAssociates.com

Centers for Medicare & Medicaid Services recently announced the release of a State Medicaid Director's letter regarding Same Sex Partners and Medicaid Liens, Transfers of Assets, and Estate Recovery. The purpose of this letter is to ensure that States are informed of the existing options and flexibilities in setting their Medicaid eligibility policy. Specifically, the letter advises States of existing choices and options regarding spousal and domestic partner protections related to liens, transfer of assets, and estate recovery.

Liens

The Social Security Act (the Act) allows, but does not require, States to impose liens on the property of a Medicaid beneficiary under certain circumstances. However, liens may not be imposed in instances where certain people are lawfully residing in the home. Some of these individuals include a spouse (as defined in the Defense of Marriage Act of 1996 (DOMA)), a child under age 21, and children who are blind or totally/permanently disabled. This letter clarifies that a State can have a policy or rule not to pursue liens when the same-sex spouse or domestic partner of the Medicaid beneficiary continues to lawfully reside in the home.

Transfers of Assets

States are required to have provisions regarding transfers of assets for less than fair market value. A State Medicaid plan must provide that, if an institutionalized individual or the spouse of an individual transfers assets for less than fair market value after the "look-back" date, the State will calculate and impose a period of ineligibility during which Medicaid payment is not available.

While periods of ineligibility are generally required, the Act establishes certain exceptions to the provisions regarding transfers of assets to prevent hardship, allowing individuals who have transferred assets to receive long-term care services without the imposition of any penalty period in certain circumstances. The statute specifically exempts transfers of any type of asset to a spouse or to another person for the sole benefit of the spouse. However, CMS declined to apply the exemptions for transferring assets to a spouse to same-sex spouses or partners as a result of DOMA's definition of marriage as being between a man and a woman.

Due to the flexibility afforded to States in determining whether undue hardship exists, and the circumstances under which they will not impose transfer of assets penalties, CMS does believe that States may adopt criteria, or even presumptions, that recognize that imposing transfer of assets penalties on the basis of the transfer of ownership interests in a shared home (not other assets, such as stocks, bonds, etc.) to a same-sex spouse or domestic partner would constitute an undue hardship.

Estate Recovery

The Act requires States to pursue estate recovery when a Medicaid beneficiary received medical assistance under the State plan under certain circumstances. Medicaid estate recovery may be made only when there is no surviving spouse (subject to the provisions in DOMA) and when there is no surviving child under age 21, or blind or disabled child of any age. When estate recovery occurs pursuant to a lien, protections are afforded for siblings still lawfully residing in the home, as well as for sons or daughters who provided care to the parents and who continue to lawfully reside in the home.

In addition, States are required to have procedures to waive estate recovery where it would create an undue hardship for the deceased Medicaid recipient's heirs. States have flexibility to design reasonable criteria for determining what constitutes an undue hardship and who may be afforded protection from estate recovery in such instances. At the State's discretion, this may include establishing reasonable protections applicable to the same-sex spouse or domestic partner of a deceased Medicaid recipient. The State plan need only specify the criteria for waiver of estate recovery claims due to undue hardship.