MEMORANDUM
IM-#64      08/18/08

DISCUSSION:

Senate Bill 577 (2007) establishes a long-term care partnership program between the Department of Social Services and the Missouri Department of Insurance, Financial Institutions, and Professional Registration (DIFP) in Sections 208.690 through 208.698 RSMo as authorized by the Deficit Reduction Act (DRA) of 2005. Prior to the DRA only four states, California, Connecticut, Indiana, and New York, were able to sell long-term care partnership policies.

Effective immediately, allow a disregard of assets in determining eligibility for MO HealthNet for the Aged, Blind, and Disabled (MHABD) individuals who received benefits from long-term care policies that qualify as long-term care partnership policies. A policy issued in another state qualifies for the disregard as long as the state had a partnership program. In addition to an asset disregard during eligibility determination, MO HealthNet Division allows the asset disregard during estate recovery. This memorandum introduces the long-term care partnership in Missouri and explains:

• how to apply the asset disregard;
• how to determine if the policy is a qualified long-term care partnership policy;
• Estate Recovery;
• Qualified long-term care partnership policy requirements; and
• legal basis for Missouri’s long-term care partnership.

Updates are made to the December 1973 Eligibility Requirements section of the Income Maintenance Manual to include policy for Missouri’s long-term care partnership.

How to Apply the Asset Disregard

Disregard assets or resources equal to the amount of long-term care benefits paid on behalf of an individual from the eligibility determination if the long-term care policy meets the requirements of a qualified long-term care partnership policy. DIFP will certify which long-term care policies qualify as long-term care partnership policies. The total amount of assets disregarded is the total amount of long-term care benefits paid to or on behalf of the individual as of the month of his or her application for MHABD benefits. The asset disregard is applied to resources considered available to the participant as defined in Income Maintenance Manual Sections 1030.000.00-1030.030.10.15 .The eligibility specialist must verify with the long-term care insurance company the amount of benefits paid to or on behalf of the applicant as of the month of application.

The insurance benefits upon which a disregard may be based include benefits paid:

• as a direct reimbursement of long-term care expenses paid while the participant was residing in a nursing facility or at home; or
• on a per diem, or other periodic basis, for periods during which the individual received long-term care services.

The amount disregarded as an asset in determining eligibility and in estate recovery is the amount the insurance carrier verifies as paid to or on behalf of the individual as of the month of application. Submit any questions regarding the amount of asset disregard for a qualified long-term care partnership policy on an IM-14 Request for Policy Interpretation to the IM Program and Policy Unit through regular supervisory channels.

NOTE: The benefits available under a qualified long-term care policy are not required to be fully exhausted before the disregard of assets is applied.

EXAMPLE: Mr. Manning moved to Missouri from Indiana in 2005. He applied for Mo HealthNet vendor benefits in Missouri on August 6, 2008. Mr. Manning owns a $75,000 home in Missouri where he lived prior to entering the nursing facility. He also has a certificate of deposit (CD) at the local bank for $50,000. Mr. Manning has a qualified long-term care partnership policy that he purchased in Indiana eight years prior to his application for benefits in Missouri. The eligibility specialist contacted the long-term care insurance company and verified that the amount paid on behalf of Mr. Manning for long-term care benefits as of August 2008 was $65,000.00. DIFP verified the policy qualifies as a long-term care partnership policy.

When determining Mr. Manning's eligibility for vendor care, the eligibility specialist disregards $65,000 of his assets. The eligibility specialist applies the asset disregard to Mr. Manning’s $50,000 CD. The home is already exempt as an asset in determining eligibility. Therefore, Mr. Manning is eligible for vendor benefits in Missouri, if all other eligibility requirements are met.

The eligibility specialist completes a TPL-1 form for the long-term care policy and sends it to MO HealthNet Division’s Third Party Liability Unit along with an attachment verifying he qualifies for $65,000 asset disregard during estate recovery.

EXAMPLE: Ms. Dallas moved to Missouri from California in 2006. She applied for MO HealthNet vendor benefits in Missouri on August 6, 2008. Ms. Dallas owns a $50,000 home in Missouri where she lived prior to entering the nursing facility. She has no other assets. Ms. Dallas purchased a qualified long-term care partnership policy in California six years ago. The eligibility specialist verified that the amount paid for long-term care benefits on her behalf as of August 2008 was $25,000. DIFP verified the policy qualifies as a long-term care partnership policy.

When determining Ms. Dallas’ eligibility for vendor care, the eligibility specialist determines the home is already exempt. Ms. Dallas is eligible for vendor benefits in Missouri, if all other eligibility requirements are met.

The eligibility specialist completes a TPL-1 form for the long-term care policy and sends it to MO HealthNet Division’s Third Party Liability Unit along with an attachment verifying she qualifies for $25,000 asset disregard during estate recovery.

NOTE: Because Ms. Dallas qualifies for MHABD without applying the asset disregard to determine eligibility, the eligibility specialist is not required to hold the application in pending status to verify the amount of disregard to apply during estate recovery. The application can be approved without the verification of the disregard to apply during estate recovery. If the application is approved without verification, the eligibility specialist must complete a TPL-1 form for the long-term care policy and send it to MO HealthNet Division’s Third Party Liability Unit along with an attachment alerting them about the possibility of eligibility for an asset disregard during estate recovery.

How to Determine if the Policy is a Qualified Long-Term Care Partnership Policy

The Missouri Department of Insurance, Financial Institutions, and Professional Registration (DIFP) must certify that a policy qualifies as a long-term care partnership policy in order for the Family Support Division (FSD) to apply the disregard of assets during the eligibility determination. All qualified long-term care partnership policies in the State of Missouri will include a Long-Term Care Insurance Partnership Delivery Notice and/or Long-Term Care Insurance Partnership Disclosure Notice as part of the policy. Use these forms to verify that the long-term care policy is a qualified long term-care partnership policy.

Prior to the Deficit Reduction Act (DRA) of 2005, only four states were authorized to sell long-term care partnership policies that disregard assets during eligibility determination and estate recovery: California, Connecticut, Indiana, and New York. Iowa was authorized to implement a long-term care partnership, but chose not to implement one at that time.

Contact John Howser at the Missouri Department of Insurance, Financial Institutions, and Professional Registration at 573-751-1713 or john.howser@insurance.mo.gov for verification that out-of-state policies or policies that do not include the above documents qualify for the asset disregard.

Estate Recovery

The amount of assets disregarded in the eligibility determination must be reported to MO HealthNet Division’s Third Party Liability Unit so that the asset disregard may be applied in the estate recovery process. Policy regarding reporting of third party insurance has not changed. Complete a TPL-1 form on the long-term care policy and send it to the Third Party Liability Unit. Include an attachment verifying the asset disregard and the date of death if applicable.

NOTE: If the applicant qualifies for MHABD without applying the asset disregard to determine eligibility, the eligibility specialist is not required to hold the application in pending status to verify the amount of disregard to apply during estate recovery. The application can be approved without the verification of the disregard to apply during estate recovery. If the application is approved without verification, the eligibility specialist must complete a TPL-1 form for the long-term care policy and send it to MO HealthNet Division’s Third Party Liability Unit along with an attachment alerting them about the possibility of eligibility for an asset disregard during estate recovery.

Qualified Long-Term Care Partnership Policy Requirements

Qualified long-term care policies must meet all the requirements of Section 6021 of the Deficit Reduction Act 2005. These requirements are in Section 1030.055.20 of the Income Maintenance Policy Manual.

Legal Basis for Missouri’s Long-Term Care Partnership

Senate Bill 577 (2007) establishes a long-term care partnership program between the Department of Social Services and the Missouri Department of Insurance, Financial Institutions, and Professional Registration (DIFP) in Sections 208.690 through 208.698 RSMo. Section 6021 of the Deficit Reduction Act (DRA) of 2005 amended Section 1917(b) of the Social Security Act providing for the disregard of assets in determining eligibility for Medicaid (MO HealthNet) benefits and in the estate recovery process. Prior to the DRA only four states, California, Connecticut, Indiana, and New York, were able to sell long-term care partnership policies. A fifth state, Iowa, was authorized to implement a long-term partnership program prior to the DRA of 2005, but did not do so at that time.

The amount disregarded is an amount equal to the amount of long-term care insurance benefits paid to or on behalf of the individual as of the month of application if the long-term care insurance policy is a qualified long-term care policy under the partnership program.

The Missouri long-term care partnership and disregard of assets is effective July 30, 2008.

NECESSARY ACTION:

• Review this memorandum with appropriate staff.
• Disregard assets for an individual with a qualified long-term care partnership policy in an amount equal to the amount of long-term care benefits paid to or on behalf of the individual as of the month of application.
• Complete and send a TPL-1 form for the long-term care policy with an attachment verifying the asset disregard and the date of death if applicable.

SS

ATTACHMENTS:

• Long Term-Care Insurance Partnership Delivery Notice
• Long Term-Care Insurance Partnership Disclosure Notice