Sunday, August 21, 2011

Pennsylvania Clarifies its Medicaid Policy on Transfers to a Disabled Child


Medicaid law limits the ability of an individual to give away their assets in order to meet the resource level required for Medicaid help in paying for nursing home care or Medicaid funded Home and Community-Based Services. It imposes a period of ineligibilty for benefits if assets have been given away during the preceding five years. 

However, the law that penalizes transfers of assets includes a number of exceptions. One important exception applies to transfers that are made by a parent to his or her disabled child. 42 U.S.C. § 1396p(c)(2)(B)(iii) provides that “An individual shall not be ineligible for medical assistance by reason of [the transfer penalty rules] to the extent that . . . the assets were transferred to, or to a trust . . . established solely for the benefit of, the individual’s child described in subparagraph (A)(ii)(II) [which describes blind and disabled children].” 

Recently, the Pennsylvania Department of Public Welfare (DPW) issued a policy clarification to help clear up any confusion about this exemption among caseworkers at County Assistance Offices.  The DPW Policy Clarification (PMN15789440) was dated May 18, 2011.  It answers four key questions:

1.     Can assets be transferred to an individual's disabled child? 
2.     Is there an age limit for the individual’s disabled child?
3.     If assets are transferred will a penalty period be imposed?
4.     Could the asset transfer affect the eligibility begin date? 

The answers given by DPW’s Division of Health Services are as follows:
1.     Yes, assets (income and resources) may be transferred to an individual’s child, who is disabled per Social Security (SS) standards for the sole benefit of the child.  The disability must be documented.
2.     No, there is no age limit for the individual’s disabled child, including an adult child.
3.     No, a penalty period will not be imposed if the asset is transferred to an individual’s child who is documented as disabled per SS standards. 
4.     Yes, if an individual applying for Medical Assistance (MA) and payment of Long Term Care (LTC) services must reduce resources to be eligible, it could affect the begin date of eligibility, if the assets are transferred to an individual’s disabled child.  I.E. Mr. B is requesting MA LTC effective 2/15/11 and has resources totaling $15,000.  He has a child, who is documented as disabled per SS standards.  On 2/28/11, he transfers $8,000 to his child for the child’s benefit.  Mr. B would be eligible for MA LTC on 3/01/11 if all other conditions of eligibility are met. 



5 comments:

JoggerGirl said...

I'm still not clear on the answer to Question #4. Why was there a two-week wait period, from 2/15/11 through 2/28/11, because Mr. B transferred $8,000? After reading the answers to Questions #1 through #3, it appears as if no penalty would be imposed if the assets are transferred to a disabled child. Could someone please clarify? Thank you.

Jeff Marshall said...

There is no transfer penalty. He did not quality for MA LTC until February 28th because he had too much in the way of resources ($15,000) until he gave away the $8,000 on February 28th.
Jeff

JoggerGirl said...

Jeff,
Thank you very much for your response. Therefore, am I correct in assuming that 100% of an annuity in a Medicaid applicant's name could be transferred--without penalty--to a disabled child? Thank you.

Jeff Marshall said...

Sorry, JoggerGirl - I'm not comfortable getting too specific or giving advice on individual situations. It's really not appropriate. I hope you understand.You should consult directly with an experienced lawyer in the jurisdiction where the parties reside.

JoggerGirl said...

Mr. Marshall,
Thanks for your info. I appreciate it!