MEMORANDUM

DISCUSSION:

Effective January 1, 2011 the Substantial Home Equity Limit will increase from $500,000.00 to $505,500.00 for individuals applying for MHABD vendor, Home and Community Based Waivers (HCB) or Program for All-Inclusive Care for the Elderly (PACE).

Under the Deficit Reduction Act of 2005 (DRA), Medicaid will not pay for long-term services for individuals whose equity in their home exceeds $505,500.00. The home equity policy does not apply in the following conditions:

• The spouse of the participant is living lawfully in the home;
• The participant’s child, who is under age 21, is living lawfully in the home; or
• The participant’s child, who is 21 or over and blind or permanently and totally disabled, is living lawfully in the home.

FAMIS is in the process of programming the system to automatically reject individuals whose equity exceeds the limit.

Until the system programming is completed, staff should enter the home into the system as normal. For individuals whose home equity is above the $505,500 limit do not enter a MHABD exemption code. This will trigger FAMIS to look at the value of the home and the case will reject or close due EXR – excessive resources. Record a comment on the Real Property (FMW4) screen regarding the reason the exclusion code was not entered.

Individuals whose home equity is below the $505,500 will continue to have the HS code entered in the MHABD exemption field to exempt the homestead.

NECESSARY ACTION:

• Review this memorandum with appropriate staff.
• Effective January 1, 2011 apply the new limit.

KE