Each year we typically receive periodic notice of Medicaid rule changes issued by the Department of Human Services (DHS). In past years, as our readers will recall, DHS issued an exceptionally high number of Medicaid rule changes primarily due to the Deficit Reduction Act (DRA). Generally, the fewer the number of Medicaid rule changes the better since the changes often make it more difficult for clients to protect their life savings from nursing home costs. In this newsletter, we highlight some of the Medicaid rule changes DHS has recently issued.
DHS has very recently modified the Minimum Monthly Maintenance Needs Allowance. This is the minimum amount of income that the at-home spouse is allowed. In 2008, the minimum allowance that the at-home spouse was allowed was $1750. Now, the Minimum Monthly Maintenance Needs Allowance has been increased to $1822.
At the beginning of 2009, DHS issued a rule change that was somewhat surprising and rather drastic. No longer is non-homestead real estate considered to have $0.00 value after it has been listed for sale for 30 days. Now, real property must be listed for sale at least 3 months prior to the filing of a Medicaid application. As expected, this has had a very negative impact on nursing home residents who have non-homestead real estate that is a countable asset under the Medicaid rules. For example, suppose a widow has a home, $7,500 bank account and a vacant lot worth $15,000. She will not be eligible for Medicaid until the vacant lot has been listed for sale for at least 3 months. During the 3 month period, she will have to pay the nursing home privately about $20,000 before Medicaid benefits can begin. Unless she can sell the vacant lot quickly, she will simply not have enough money to pay the nursing home.