The Department of Human Services (DHS) has recently released two proposed changes to the Medicaid rules. If adopted, these new rules would be effective October 1, 2012. These new changes impact married couples and are a potential trap for the unwary and uninformed. As is so often the case, it is critical that families and their loved ones be advised of these rule changes to avoid being denied Medicaid benefits at a time when a spouse desperately needs Medicaid coverage.
Here are the proposed rule changes which are scheduled to take effect on October 1, 2012:
1. Review of all assets owned by a married couple after one year.
After a husband or wife is approved for Medicaid benefits, they are allowed one year to transfer assets from the spouse who resides in the nursing home to the spouse who resides at home (i.e. the community spouse). This is referred to “presumed asset eligible period”. The purpose of the presumed asset eligible period is to allow sufficient time to transfer assets without penalty to the community spouse. This is necessary to establish continued Medicaid eligibility for the nursing home spouse after the first year following the initial approval of Medicaid benefits.
The proposed rule change will require at the end of the first year of Medicaid eligibility, the DHS caseworkers verify all assets previously owned by the married couple and determine if any divestment (i.e. gifting) has occurred. It is critical that married couples be aware of this one year review and avoid making any gifts during this time.
2. The MIChoice Waiver program allows married couples to divert income.
This proposed Medicaid rule change confirms that a married person approved for the MIChoice waiver program can divert income to his or her spouse without being penalized for gifting. This change is critical in allowing the community spouse the means to pay his or her living expenses while the other spouse receives Medicaid benefits.
Medicaid rule changes often impact the uninformed the hardest. With a married couples’ life savings at risk due to the high cost of nursing home care, it more important that ever to seek the assistance of an experienced elder law attorney.