This worker guide covers the treatment of long-care term care (LTC) insurance for ongoing clients and the treatment of resources for an applicant who has utilized LTC insurance purchased through the LTC insurance partnership (a qualified partnership policy).
The circumstances around LTC insurance payments vary greatly from insurance company to insurance company. Some policies start payment immediately upon placement and others must have a waiting period before payments begin. Policies pay different rates depending on the type of policy the client has purchased and some types of care may not be covered. Policies most often pay by the day, resulting in payment amounts that vary from month to month. Most policies pay directly to the client, while others pay directly to the facility.
For clients who report that they have LTC insurance on the Application Form (SDS 539A):
By signing the application, the client has assigned his or her rights to medical insurance payments to the Department, as required by 461-120-0315. When the client is placed in a care setting covered by the client’s LTC insurance policy, the worker must make sure the client applies for all insurance payments. It may be helpful to create a tickler in Oregon ACCESS as a reminder to follow up on the client’s payments on a monthly basis.
Be sure to inform the client or the representative of the process for dealing with long term care insurance payments. Clients who fail to obtain their LTC insurance payments and provide those payments either to the Department or the facility (depending on the care setting as explained below) are not eligible for Medicaid.
For clients in home or community-based care settings, it is acceptable for the LTC insurance payments to be made directly to the client or their representative. However, the client must turn the payment over to the Department when it is received. The Department receipts the payment in as a reimbursement of past assistance, per the procedure described in the Support Staff Assistance Manual, Section II-G-3. The receipt code is 121. This code ensures that the payment will be credited against the client’s estate claim.
Send these payments to:
Medical Payment Recovery Unit
PO Box 14023
Salem, OR 97309
If allowed by the client’s LTC insurance provider, the client can designate the Department as the payee for the LTC insurance payments. These checks should be made payable to the "Department of Human Services." When the Department is the payee, turning in the payments each month is not necessary, but completing the paperwork to get each payment issued is still required.
Sometimes when LTC payments are paid directly to the Department, the insurance carrier issues a 1099 in the Department's name at the end of the year. If you receive such 1099, send it to:
Nancy Walton
500 Summer St NE
4th flr,
Green 24
Salem OR 97301
For these care settings, the Department continues to pay for the client’s services, less any liability for the client’s share. The Department’s payment to the facility is not interrupted or delayed due to the LTC insurance payments.
It is the facility’s responsibility to adjust the Department’s bill as payments are received.
The Department’s service payment to the facility may be denied or delayed due to the LTC insurance payments. If the client’s MMIS record shows that LTC insurance payments are available, the facility’s claim will not be paid unless the claim shows a third party resource adjustment or denial from the insurance provider.
A Qualified Partnership Policy (QPP) is a LTC insurance policy that would afford extra benefits to clients who utilize the LTC payments prior to applying for Medicaid. Having a QPP is an incentive for individuals to plan ahead and purchase LTC insurance.
QPPs are transferable from state to state. That means if a client purchased a QPP while the client resided in another state and after the effective date for that state’s partnership program, the client will receive the same benefits described in this worker guide as if the policy had been purchased in Oregon.
Per 461-160-0855 the client is eligible for a special resource exclusion in an amount equal to the amount of payments received under a QPP at application for Medicaid. The worker will be able to recognize a QPP issued in Oregon because the client will receive a notice with their LTC policy stating that it is a QPP. The worker can verify the total payments a client has received under a QPP issued in Oregon by the client’s “explanation of benefits” (EOB). The EOB will verify the total payments to date from the Partnership Policy and if there are any benefits remaining. If the client does not have their EOB, they can request a replacement from their insurance company.
If a policy was issued in another state and the client claims it is a QPP, the worker will need to verify with the other state that it is a QPP. The client gets the same resource exclusion for an out-of-state QPP as they would get from a QPP purchased in Oregon, unless the QPP was purchased in California or New York. For these 2 states, there is no required reciprocity agreement, so the client does not get any resource exclusion in Oregon. For out-of-state QPPs that qualify for resource exclusion, the EOB or other verification from the insurance company can be used to verify the total payments received too. |
The Insurance Division has also created a form that the client can use to send to the LTC insurance company to verify QPP information. Contact the SPD policy unit if you need help verifying this information with the other state.
Assets that are excluded due to the receipt of QPP payments may be gifted without penalty (OAR 461-140-0220). However, if the client chooses to gift the assets prior to applying for Medicaid, then the amount of the assets excluded in the eligibility determination must be reduced. There could still be a transfer penalty to serve if the client transfers more assets than are excluded by the QPP payments.
Example 1: Nadene gave $40,000 to her son a year ago when her QPP was paying for her nursing facility placement. She has now received a total of $130,000 QPP payments and is applying for Medicaid. The gift to her son is not disqualifying, but the amount of the resources that can be excluded in the eligibility determination is $130,000 QPP payments minus $40,000 gift = $90,000.
Example 2: Leroy gave $160,000 to his grandchildren a year ago when his QPP was paying for his nursing facility placement. He has now received a total of $130,000 QPP payments and is applying for Medicaid. $130,000 of the gift is not disqualifying due to the QPP payments received, but Leroy’s gifts of $160,000 exceeds the QPP amount by $30,000, so Leroy still needs to serve a disqualification for $30,000 before he will be eligible for Medicaid.
The eligibility worker has the option of using the Resource Calculation when there are QPP Payments (SPD 3404) to help them calculate resources that are excluded and whether the client’s resources meet the Medicaid limit. If the worker chooses not to use this form, he or she can narrate the calculation in Oregon ACCESS.
If the QPP pays benefits in such a small amount that the client is not able to use the payments prior to applying for Medicaid, then the client is not eligible for any resource exclusion.
Example 3. Helen purchased a QPP that pays benefits of $100 per day. Years later, Helen was in a car accident and suffered injuries that required nursing facility care at the cost of $195 per day. Helen does not have enough income to make up the difference in coverage of $95 per day, so she applies for Medicaid. At application, she is in her 60-day waiting period and has received no QPP payments to date. Even though Helen has a QPP, she is not eligible for any resource exclusion because she has received no QPP payments. The eligibility worker narrates in Oregon ACCESS that Helen has a QPP, but she has received zero payments so there is zero resource exclusion allowed.
If the client has accessed only part of the QPP payments prior to applying for Medicaid, then the client is eligible for a resource exclusion only for the amount of total benefits received to date.
Example 4. Bernie purchased a QPP that pays benefits of $120,000 over 2 years. When Bernie applies for Medicaid, he has received $50,000 in LTC insurance payments. He also has countable resources of $240,000 now, but had $270,000 countable resources when care began. His spouse Irene lives in the couple’s home, so it is excluded. When doing the resource assessment in Oregon ACCESS, the worker excludes $50,000 due to QPP payments received, so the countable resources are reduced to $190,000. Irene’s community spouse resource allowance (CSRA) is $109,560 because ½ of $270,000 when care began exceeds the maximum. The eligibility worker determines that $190,000 (countable resources after QPP exclusion) - ($2000 client resources + $109,560 CSRA) = $78,440 that the couple has now that exceeds the resource limit. After the couple has spent down this excess, Bernie will be eligible for Medicaid.
Remember--part of the spend down will be met by additional QPP payments Bernie receives while spending down. The client is entitled to a resource exclusion for the total QPP payments received at the time of the initial month of eligibility. The eligibility worker clearly narrates in Oregon ACCESS the total amount of resources excluded due to the receipt of QPP payments, when the case is approved. The worker also notifies the client by 3402 and Estate Administration by the “Remarks” section of the 647.
If the client has accessed all of the LTC payments prior to applying for Medicaid, then the client is eligible for a resource exclusion for the total value of the policy.
Example 5. Milo, who is married to Gertrude, is applying for services. Milo exhausted his $120,000 QPP prior to applying for Medicaid. The couple has countable resources of $280,000. When doing the resource assessment in Oregon ACCESS, the eligibility worker determines that ½ of the resources ($140,000) exceeds the maximum, so Gertrude’s community spouse resource allowance (CSRA) is $109,560. The eligibility worker determines that $280,000 countable resources minus ($120,000 QPP exclusion + $2000 client resources + $109,560 CSRA) = $48,440 that the couple has now that exceeds the resource limit. After the couple has spent down this excess, Milo will be eligible for Medicaid with resources of $122,000 for Milo and $109,560 for Gertrude = $231,560 total. The eligibility worker clearly narrates in Oregon ACCESS that $120,000 in resources were excluded due to the receipt of QPP payments, when the case is approved. The worker also notifies the client by 3402 and Estate Administration by the “Remarks” section of the 647.
Example 6. Howard has exhausted his $120,000 QPP prior to applying for Medicaid. He now has countable resources of $121,500. The worker excludes $120,000 and finds Howard eligible because his remaining countable resources are $1500. The eligibility worker clearly narrates in Oregon ACCESS that $120,000 in resources were excluded due to the receipt of QPP payments, when the case is approved. The worker also notifies the client by 3402 and Estate Administration by the “Remarks” section of the 647.
The client’s QPP amount can change, if the Medicaid case is approved with a QPP exclusion, the case closes (for 30 days or more) and the client receives more QPP payments, and the case is subsequently approved again.
Example 7. Wanda has a QPP and receives $70,000 in payments before being determined eligible for Medicaid. The eligibility worker narrates that Wanda is eligible for a QPP exclusion of $70,000 and sends a 3402 to Wanda and a 647 to Estate Administration. Wanda continues to receive QPP payments while she is on Medicaid, and those are reimbursed to the Department. Wanda then receives a $120,000 inheritance and her case closes for 6 months. When she again becomes eligible for Medicaid, the eligibility worker determines that the cumulative QPP payments are now $150,000. The worker narrates that Wanda is eligible for a revised QPP exclusion of $150,000 and sends a 3402 to Wanda and a 647 (indicating the amount of the QPP protection in the “Remarks” section) to Estate Administration.
If the excluded resources have decreased in value due to no action on the client’s part (such as losing value due to the economy), additional assets may be excluded up to the entire QPP amount. If the excluded resources have decreased in value due to a client’s action to spend or gift the resources, then the amount of excluded resources due to the QPP payments is reduced accordingly. For example, if the client had $140,000 excluded resources due to QPP payments but you find at redetermination that $60,000 has been spent, then only the remaining $80,000 in resources continues to be excluded. In addition, the EAU must be notified of the reduced amount of excluded resources (See the Estate Administration Claim Exclusion below).
A client who utilizes a QPP is also eligible for the amount that was excluded in the eligibility determination, to be excluded from the estate administration claim, when the client passes away. This is true as long as the client did not transfer or spend all or part of the amount that was excluded prior to his or her death. The resources excluded due to QPP payments are not subject to transfer of asset disqualifications, so the client may spend the resources or gift them away without a penalty (461-140-0220). If all or part of the amount of resources are spent or gifted away, however, the client’s estate will no longer be protected from collection for that amount of resources. It is very important for the eligibility worker to designate the amount of resources excluded by QPP payments in the Oregon ACCESS narrative, and by notifying the client by 3402 and Estate Administration by the “Remarks” section of the 647 so that the same amount will be protected from the estate claim process. If the worker later learns that the client has gifted all or part of the amount of excluded resources, this needs to be clearly narrated in Oregon ACCESS so that Estate Administration can adjust the Department’s claim accordingly.
Example 8. In example 6 for Howard above, he has $121,500 total countable resources and $120,000 is excluded due to the receipt of QPP payments. The worker narrates this in Oregon ACCESS, notifies the client by 3402 and sends a 647 (indicating the amount of the QPP protection in the “Remarks” section) to Estate Administration to exclude $120,000 from the estate claim process. At application, Howard owned a home that was excluded, $40,000 RV, $65,000 CD, $13,000 savings and the remaining $3500 was in his checking account (he also has an excluded life insurance plan to cover burial). The eligibility worker determines that $40,000 RV + $65,000 CD + $13,000 savings + $2000 checking = $120,000 excluded due to QPP payments. The home is excluded because Howard lives there and the remaining $1500 in the checking account is less than the $2000 resource limit. Before Howard dies, he gives the RV and the CD to his son and the worker notes this in the Oregon ACCESS narrative. Therefore, when he dies his estate consists of the home, $13,000 savings and $3500 checking. Because Howard gifted $40,000 + $65,000 = $105,000 before he died, his QPP Estate Administration protection of $120,000 is reduced by $105,000 to $15,000.
Example 9: Marjorie has exhausted her $180,000 QPP prior to applying for Medicaid nursing facility services. She now has $1800 countable cash resources and an excluded home with equity value of $270,000 (the home is listed for sale). The worker narrates in Oregon ACCESS that Marjorie is eligible for $180,000 to be excluded due to QPP payments, sends a 647 (indicating the amount of the QPP exclusion in the “Remarks” section) to Estate Administration and finds Marjorie eligible because the home is an excluded resource and her remaining countable resources are $1800. Marjorie passes away and the home never sells. When the estate claim is made, the most the Department could collect from the home equity would be $270,000 minus $180,000 excluded due to QPP payments = $90,000 and the $1800 cash to reimburse the Department for the cost of Marjorie’s medical care.
If a client receives Medicaid benefits before the receipt of QPP payments, those benefits are not protected in the Estate Administration collection process.
Example 10. Stanley is a client who had a stroke at age 55 and was eligible for Medicaid services. He received Medicaid for a year, and then was determined no longer eligible because he made a great recovery. After his case closed, he began working again and purchased a QPP for $200,000. At age 65, his health deteriorated again and he exhausted his QPP. When he is again determined eligible for Medicaid, the eligibility worker narrates in Oregon ACCESS that $200,000 is excluded due to the receipt of QPP payments and sends a 647 (indicating the amount of the QPP exclusion in the “Remarks” section) to Estate Administration. When the estate claim is made, only Medicaid benefits received after age 65 are protected from collection and not the Medicaid benefits received at age 55.
