Spousal Impoverishment Protections in Medicaid Home Care Program Help All Ages

NAELA has been at the forefront of keeping the Spousal Impoverishment Protections in the Medicaid Home Care Program (HCBS) that were included in the Affordable Care Act.  So far, with great effort, it’s working.

It’s important for disabled people who are under 65 and who meet the nursing facility level of care to recognize that these protections are out there. The “level of care” standard is generally thought of as needing assistance with three of six of the basic ADL’s, called activities of daily living. The disability community worries a lot about the “marriage penalty” in SSI, and this is a real and legitimate concern.  But in New Jersey, if it’s homecare that’s preeminent, marrying your significant other should not necessarily prevent you from keeping your Medicaid/MLTSS benefits.  Spouses are allowed to keep certain exempt assets, and all of their income from working and other sources, without affecting the Medicaid applicant’s eligibility.

Sometimes when a disabled person is used to being on one kind of Medicaid eligibility, they accept what their caseworker says about what they can and can’t do.  Never take what a Medicaid worker says at face value!  Speak with an elder law attorney and get that critical second opinion.  You may not even realize what creative planning options are out there!

Call for advice on Medicaid applications, asset protection and appeals ………. 732-382-6070

More reasons to consult with a lawyer when filing for Medicaid

The Medicaid program pays for nursing home care for financially eligible people. The program is administered by the State Division of Medical Assistance and Health Care Services (DMAHS), which delegates the application processing to the employees of the county Boards of Social Services (sometimes called county welfare boards). All of these people are government employees. They receive and process applications by relying on the NJ State Medicaid Manual — which is the state’s regulations, that are in turn based on federal law — and innumerable directives received informally through the policy process behind the scenes. Then there are the administrative procedures which are locally created. There are 23 counties in New Jersey and the procedures that are used in Middlesex County, for instance, may be quite different than those used in Passaic or Burlington.

What this means for an applicant is that if they call a friend who applied in a different county, they could be getting an incorrect picture of what to expect in their own county.

Another big issue is that  there is a general legal principle by which New Jersey government employees may not// do not provide “advisory opinions” to applicants as to how the law applies to their given case. I represented state agencies back in the 80’s and early 90’s and we would get calls from people asking questions like “I want to do such-and-such. Do your regulations allow that?” and we’d have to politely demur and suggest that they call their own lawyer to interpret the law for them.

Why is this problematic for Medicaid applicants? The State Medicaid Manual at N.J.A.C. 10:71-2.2(c) gives the local agency the responsibility to “1. inform the applicants about the purpose and eligibility requirements for Medicaid” and  “…3. Assist the applicant in exploring their eligibility for assistance.”  So a person files an application, has no idea whether they are eligible, receives vague information and no specific guidance other than “bring in five years of financial records and all these other verifications,” and then sits and waits months and months without receiving any “assistance” from the agency. Sometimes, a denial notice is issued a year or more after the initial application was filed, and that’s when the applicant discovers that they still have “excess resources,” are not eligible, and have a giant debt to the facility.

This is particularly problematic for married couples, because the community spouse is entitled to retain a protected share of assets (called the CSRA), and there is thus a specific “target” for the spend-down in every single case, which can be easily calculated by adding together the value of all the non-excluded assets as of the date the ill spouse entered the facility, dividing by 2, and comparing that number to the maximum limit of the program. So  if the caseworker doesn’t do the “resource assessment” and calculate the protected community spouse resource allowance for the applicant early in the process, the applicant will never know just what the “target end point” is for the spend-down. Nursing homes cost more than $10,000 every month. If that couple doesn’t “spend down” to below the target, the hapless community spouse will be personally liable for the nursing home bill for every month until they hit the target.

I encountered an egregious example of this problem recently. Believe me, this is not the first time I’ve seen this happen. Wife entered facility in the fall of 2013. Husband went to the Medicaid office in early 2014. Husband needed to “spend-down” to $119,000 and wife could keep $2,000, but he didn’t know that at the time. Caseworker gave him a list of required documents to provide to her. Shortly after the initial intake, caseworker sent an appropriate letter asking for the documents needed to do the “resource assessment” which is what I’m talking about here — to determine his spend-down target. Applicant provided those records and never received any information after that. No calls, no calculations, no letters, no replies to phone calls; nothing. He eventually calls the agency and is told “just spend down” “Well how much do I have to spend?” he asks and the answer is “you have to spend down. Have a nice day. Goodbye.” Long story short, he spent over $100,000 on the nursing home in the first year, went back to Medicaid a year later and filed the application, got no assistance from the agency and only got requests for documents on repeated occasions, and never knew that he still had a little too much left in the resources because no one gave him any “assistance.” He received a Denial notice recently, saying that he had $24,000 of “excess resources” and therefore wasn’t eligible!! He is now in arrears to the facility for a full year of his wife’s care.

There are many federal rules that are designed to PROTECT the assets of an applicant and their spouse, and it’s just not true that you have to “just keep spending down.” But applicants won’t get that advice from the agency charged with “assisting” them, and non-attorneys aren’t necessarily familiar with the intricacies of federal and state law that can be used to protect Medicaid applicants and their families. Call an elder law attorney – you don’t have to do this on your own.

Call us for an appointment to discuss Medicaid eligibility, filing an application, or pursuing an appeal … 732-382-6070