June 2009 "More Nursing Home Finance Regulations Coming"
PLANNING FOR WEALTH & SECURITY
By attorneys Jennifer & Jeff Hawkins
More Nursing Home Finance Regulations Coming
Indiana has been a Medicaid law breaker since February 2006. The Federal Deficit Reduction Act of 2005, passed in 2006, required all states to use the federal Medicaid law. Indiana’s legislature adopted the federal law when it enacted Senate Enrolled Act 301 (“SEA 301”) earlier this spring. The Indiana law takes effect on October 1, 2009, but the Indiana Family and Social Services Administration (the “FSSA”) will not publish or enforce its detailed rules until sometime after October 1, 2009. Meanwhile, FSSA is negotiating with a group of organizations that includes the Indiana chapter of the National Academy of Elder Law Attorneys (“NAELA”) so that the detailed rules will be fair and reasonable.
SEA 301 establishes harsh consequences for anyone who makes a gift or sells property for less than its fair market value after October 1, 2009. Most people should forget everything that they know about laws concerning gifts and sales of property under for less than the fair market value, because the new rules will be completely different after October 1, 2009. For example, if a person transfers a home or farm land to their children or grandchildren after October 1, 2009, and if the person suffers a health crisis that requires nursing home care, the gift or sale of property for less than the fair market value will disqualify that person from assistance for nursing home care after the person runs out of money and can no longer pay for nursing home care independently. Other rules limit how a person can invest in annuities and other financial products.
Sullivan’s Jeff Hawkins serves on Indiana’s NAELA committee that negotiates with FSSA. The ongoing FSSA negotiations concern such issues as how a person qualifies for Medicaid assistance if the family cares for the person at home. Indiana law requires that the Indiana Attorney General ensure that that FSSA’s rules comply with state and federal law. Then, FSSA must reprogram its computers and train hundreds of caseworkers to apply the new rules to the thousands of Indiana nursing home residents that apply for help each year.
As you may guess, the rule implementation process will give nursing home residents and their families a very unstable experience for the next few years until the state fixes bugs in the new computer programs and caseworkers become accustomed to the new rules. The Indiana NAELA Chapter sees this negotiation process as a positive movement by the State of Indiana and looks forward to Indiana’s establishment of a fairer and more logical Medicaid system.
THIS ARTICLE IS NOT LEGAL ADVICE. ALWAYS CONSULT AN ATTORNEY DIRECTLY BEFORE RELYING UPON THIS ARTICLE OR CHANGING AN ESTATE PLAN.