Feds Weigh In On States' Medicaid Application Process
In 2006 the U. S. Congress enacted into law the Deficit Reduction Act. With the average annual cost of a nursing home approaching (in 2010), $80,000, and the average nursing home stay exceeding two years, the Deficit Reduction Act ("DRA") was -- and is -- intended to make it more difficult for people to impoverish themselves artificially in order to get Medicaid's help in paying for their nursing home and other long-term care.
Among other measures, the DRA changed the rules pertaining to transferring assets. The Medicaid "lookback period" was changed from three years to five years. How the "penalty period" for Medicaid-disqualifying transfers is calculated was also changed: prior to the law, the penalty was assessed from the date of the transfer. Since DRA, the penalty is assessed from the date of application for benefits.
Although the federal government sets the rules, the states are tasked with approving people for Medicaid. And to do that, the states must both obtain financial documentation from applicants and (typically) verify that information.
Last year the Senate Finance and Homeland Security Committees asked the U. S. Government Accountability Office (GAO) to conduct a study of how well the states are assessing the financial eligibility of applicants for Medicaid.
GAO published its report last month. So how are the states doing?
As may have been expected, the GAO found that the states were all over the place in the quantity and detail of information required of Medicaid applicants and the extent to which they verified that information.
For example, 31 states reported requiring less than 60 months' documentation from applicants and financial institutions.
And, while all states require documentation of annuities, funeral and burial plans, investments, and trusts, only 37 states require applicants to submit documentation of their primary residence -- this despite the DRA's cap on home equity value.
Under DRA, unmarried Medicaid applicants whose home equity exceeds $750,000 do not qualify financially for Medicaid -- and in most states, the home equity cap is as low as $500,000 (in 2006, it's subject to cost-of-living adjustment).
Moreover, while all states report that they conduct data matches with the Social Security Administration and the Internal Revenue Service, no state matches with all 10 sources identified in the report as available to them -- in fact, the average number among the states is six.
How is Tennessee doing? The State Department of Human Services does require documentation of sources of earned and unearned income, but not of the applicant's motor vehicle and primary residence. (These resources can ben and typically are verified independently, however.)
How is your state doing? Click here http://www.gao.gov/assets/600/593053.pdf to access the full GAO report. Navigate to page 12 for an interactive map of the United States.