SB144: Bill Text

LRB-1807/2

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2007 - 2008 LEGISLATURE

2007 Senate BILL 144

April 13, 2007 - Introduced by Senators Roessler, Darling and Olsen, cosponsored by Representatives Strachota, Townsend and LeMahieu. Referred to Committee on Health and Human Services.

SB144,1,10 An Act to renumber 49.453 (1) (f) 1., 49.453 (1) (f) 2. and 49.453 (4) (a); to renumber and amend 49.453 (3) (a), 49.453 (8) and 647.05; to amend 49.453 (1) (a), 49.453 (1) (d), 49.453 (1) (e), 49.453 (1) (f) (intro.), 49.453 (1) (fm), 49.453 (1) (i), 49.453 (3) (b) (intro.), 49.453 (4) (am), 49.453 (4) (b), 49.453 (4) (c), 49.47 (4) (a) (intro.), 49.47 (4) (b) 1., 647.02 (2) (g) and 647.04 (5); and to create 49.45 (6m) (m), 49.453 (1) (ar), 49.453 (1) (f) 2m., 49.453 (3) (a) 2., 49.453 (3) (bc), 49.453 (4) (ac), 49.453 (4) (cm), 49.453 (4) (d), 49.453 (4) (e), 49.453 (4) (em), 49.453 (4c), 49.453 (4m), 49.453 (8) (b), 49.47 (4) (bc), 49.47 (4) (bm), 49.47 (4) (cr), 632.48 (3) and 647.05 (2m) of the statutes; relating to: changes relating to assets and divestment for Medical Assistance eligibility.

Analysis by the Legislative Reference Bureau

Under current law, the Department of Health and Family Services (DHFS) administers the Medical Assistance (MA) program, which provides federal and state moneys to pay for health care and long-term care services, including care in a nursing home, provided to MA recipients, who are, generally, low-income, elderly, or disabled persons who meet other specific eligibility requirements. To be eligible for MA for long-term care services, an individual must meet certain very low income and resource requirements, and may have to pay for his or her own long-term care until the eligibility requirements are met.

Current law provides rules, based on federal law, concerning divestment, which refers to the transferring of one's assets for less than fair market value for the purpose of reducing one's income and resources to become eligible for MA for long-term care services. If a person divests assets on or after the person's look-back date (generally, the date that is three years before the person applies for MA for long-term care services), the person may be ineligible for MA for a specific time period (penalty period). The federal Deficit Reduction Act, which became effective on February 8, 2006, made a number of changes in the asset and divestment rules. This bill makes a number of changes with respect to assets and divestment to conform Wisconsin law to the federal law. The bill:

1. Changes the look-back date to five years for transfers that occur on or after February 8, 2006.

2. Changes the beginning date for the penalty period from the date on which assets were transferred to the later of the date on which assets were transferred or the date on which the person applies and is eligible for MA for long-term care services.

3. Provides that the purchase of a loan, promissory note, mortgage, or life estate after February 8, 2006, is a divestment and specifies the requirements for when such a purchase is not to be considered a divestment.

4. Provides that as a condition of receiving MA for long-term care services an applicant (when applying) or recipient (when being recertified) must disclose any interest he or she or his or her spouse has in an annuity that was purchased on or after February 8, 2006, or with respect to which a transaction occurred on or after February 8, 2006. A transaction is defined as any action that changes the course of payments to be made or the treatment of income or principal.

5. Specifies the conditions under which the purchase of an annuity on or after February 8, 2006, is not to be considered a divestment, including designating DHFS as a remainder beneficiary under the annuity.

6. Requires DHFS to establish a hardship waiver process, with certain criteria, under which the divestment rules would not apply to a person because it would result in undue hardship for the person and allows DHFS to pay the full nursing facility payment rate for up to 30 days to hold a bed in the facility for a person involved in a pending undue hardship determination.

7. Provides, generally, that a person is ineligible for MA for long-term care services if the equity in their home exceeds $750,000 unless their spouse or minor or disabled child is living in the home. Under current law, a person's home, regardless of the value, is not counted when the person's income and resources for MA eligibility are determined.

8. Specifies the conditions under which entrance fees paid by a person on admission to a continuing care retirement community or a life care community will be considered resources available to the person for paying for his or her long-term care and for determining the person's eligibility for MA for long-term care services.

For further information see the state fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

SB144, s. 1 Section 1. 49.45 (6m) (m) of the statutes is created to read:

SB144,3,5 49.45 (6m) (m) To hold a bed in a facility, the department may pay the full payment rate under this subsection for up to 30 days for services provided to a person during the pendency of an undue hardship determination, as provided in s. 49.453 (8) (b) 3.

SB144, s. 2 Section 2. 49.453 (1) (a) of the statutes is amended to read:

SB144,3,7 49.453 (1) (a) "Assets" has the meaning given in 42 USC 1396p (e) (h) (1).

SB144, s. 3 Section 3. 49.453 (1) (ar) of the statutes is created to read:

SB144,3,10 49.453 (1) (ar) "Community spouse" means the spouse of either the institutionalized person or the noninstitutionalized person.

SB144, s. 4 Section 4. 49.453 (1) (d) of the statutes is amended to read:

SB144,3,12 49.453 (1) (d) "Income" has the meaning given in 42 USC 1396p (e) (h) (2).

SB144, s. 5 Section 5. 49.453 (1) (e) of the statutes is amended to read:

SB144,3,15 49.453 (1) (e) "Institutionalized individual" has the meaning given in 42 USC 1396p (e) (h) (3).

SB144, s. 6 Section 6. 49.453 (1) (f) (intro.) of the statutes is amended to read:

SB144,3,18 49.453 (1) (f) (intro.) "Look-back date" means for a covered individual, either of the following:

SB144,4,2 1m. For transfers made before February 8, 2006, the date that is 36 months before, or with respect to payments from a trust or portions of a trust that are treated as assets transferred by the covered individual under s. 49.454 (2) (c) or (3) (b) the date that is 60 months before:

SB144, s. 7 Section 7. 49.453 (1) (f) 1. of the statutes is renumbered 49.453 (1) (f) 1m. a.

SB144, s. 8 Section 8. 49.453 (1) (f) 2. of the statutes is renumbered 49.453 (1) (f) 1m. b.

SB144, s. 9 Section 9. 49.453 (1) (f) 2m. of the statutes is created to read:

SB144,4,7 49.453 (1) (f) 2m. For all transfers made on or after February 8, 2006, the date that is 60 months before the dates specified in subd. 1m. a. and b.

SB144, s. 10 Section 10. 49.453 (1) (fm) of the statutes is amended to read:

SB144,4,10 49.453 (1) (fm) "Noninstitutionalized individual" has the meaning given in 42 USC 1396p (e) (h) (4).

SB144, s. 11 Section 11. 49.453 (1) (i) of the statutes is amended to read:

SB144,4,12 49.453 (1) (i) "Resources" has the meaning given in 42 USC 1396p (e) (h) (5).

SB144, s. 12 Section 12. 49.453 (3) (a) of the statutes is renumbered 49.453 (3) (a) (intro.) and amended to read:

SB144,4,16 49.453 (3) (a) (intro.) The period of ineligibility under this subsection begins on either of the following:

SB144,4,20 1. In the case of a transfer of assets made before February 8, 2006, the first day of the first month beginning on or after the look-back date during or after which assets have been transferred for less than fair market value and that does not occur in any other periods of ineligibility under this subsection.

SB144, s. 13 Section 13. 49.453 (3) (a) 2. of the statutes is created to read:

SB144,5,4 49.453 (3) (a) 2. In the case of a transfer of assets made on or after February 8, 2006, the first day of a month beginning on or after the look-back date during or after which assets have been transferred for less than fair market value, or the date on which the individual is eligible for medical assistance and would otherwise be receiving institutional level care described in sub. (2) (a) 1. to 3. based on an approved application for the care but for the application of the penalty period, whichever is later, and that does not occur during any other period of ineligibility under this subsection.

SB144, s. 14 Section 14. 49.453 (3) (b) (intro.) of the statutes is amended to read:

SB144,5,7 49.453 (3) (b) (intro.) The Subject to par. (bc), the department shall determine the number of months of ineligibility as follows:

SB144, s. 15 Section 15. 49.453 (3) (bc) of the statutes is created to read:

SB144,5,12 49.453 (3) (bc) In determining the number of months of ineligibility under par. (b), with respect to asset transfers that occur after February 8, 2006, the department may not round down the quotient, or otherwise disregard any fraction of a month, obtained in the division under par. (b) 3.