New Medicaid assistance recovery provisions will take effect later this summer, allowing the state to recoup expenses from those who held joint tenancies with, or remainder interests in, property held by deceased Medicaid recipients.

While many of the new provisions in this years’ Medicaid reform bill require further approval by the federal government, the new recovery provisions, which are retroactive, will take effect on August 30, sixty days after the Medicaid bill became law (without the Governor’s signature).

‘This may have very wide-ranging effect," said Manchester elder law attorney Ann Butenhof. "There are thousands of life estates and joint tenancies out there."

Under Medicaid regulations, the value of a life estate is calculated by actuarial tables, Butenhof said. For example, a person who died at age 75, and had sold her home and retained a life estate, would be deemed to own a 52 percent interest in the property.

The new law allows the state to recoup the value of that interest from the remainderman, without regard to the date on which that remainder interest was created. Similarly, the new law allows the state to look to a surviving joint tenant (though not a spouse, minor child, or disabled child) for compensation from the share of the property owned by the Medicaid recipient immediately prior to death.

Retroactivity is particularly troublesome to Butenhof, who notes that under prior law, it was not uncommon for an aging parent to transfer a remainder interest to an adult child—often the adult child who had provided years of care prior to the parent’s nursing home stay.

The new language will be at RSA 167:14-a, VI. Meanwhile, the entire 2005 Medicaid reform bill can be found on the legislature’s Web site as HB 691.

Federal Waiver Procedure

Other key provisions in the Medicaid reform bill require further approval from the federal government, as they are in conflict with federal Medicaid provisions. The Concord Monitor recently reported that the Governor is unlikely to add his—required— signature to the federal waiver request.

"These new provisions will only take effect if the state applies for a waiver, and if the federal government grants the waiver," said Nelson Raust, of the McLane, Raulerson & Middleton firm in Manchester. "The state of Connecticut recently withdrew a waiver request, based on a better bill, because the request had been pending for something like three years, and there had been no response."

Lisabritt Solsky, staff attorney for NH Department of Health and Human Services (DHHS), notes that the Connecticut waiver request had been withdrawn shortly after that state installed a new governor. She also reports that representatives from the federal Center for Medicare and Medicaid Services have been interested in the New Hampshire waiver request because it is the first to offer a balance of restricting eligibility while also providing self-sufficiency incentives regarding long-term care insurance (see below).

"There is so much going on nationally in this area right now," Solsky said. "And we are going to be out in front on this."

Look-Back Period

The key proposed change involves the so-called Look-Back Period, which would be increased to a five-year period for most transfers. Critically, the five-year clock would not start to run on the date of transfer (as it does under the current law) but five years before the application for Medicaid. Gifts made before March 15, 2005, are to be exempt from the new provision.

Current law provides a shorter look-back period for trusts, so if the new provision takes effect, Raust expects that trusts will gain increasing attention.

LTC Insurance

Another provision of the new law seeks to provide an incentive for people to buy long-term care insurance. "If you buy enough long term care insurance," Butenhof said, "the state will disregard the resource test [when determining Medicaid eligibility]."

But "enough" coverage is a policy that will pay the daily rate of the average county home—which is not a defined figure, but somewhere over $200 per day at this point, Butenhof said.

"When you buy long-term care insurance, usually you buy a policy that covers a portion of each day’s costs," Butenhof said. "So people are now buying coverage that will pay $150 per day, and even that level of coverage is too expensive for most people."

Home-Based Care

HB 691 also adds language to the state Medicaid statute encouraging home-based care, but Butenhof notes that no new money has been sent in that direction, nor has additional infrastructure been created. Nevertheless, Butenhof is encouraged that the state has begun to address what she views as a key component of overall Medicaid reform.

For now, Raust and Butenhof are advising clients about the proposed changes, and noting the areas of uncertainty.

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