Apply the following provisions to transfers that occur on or after August 11, 1993.
Section 208.010 RSMo. was revised in 1989 to conform with the provisions of the Medicare Catastrophic Coverage Act of 1988 that state in part that 'the State plan must provide for a period of ineligibility for nursing facility services and for a level of care in a medical institution equivalent to that of a nursing facility services... in the case of an institutionalized individual who at anytime during or after the 30 month period immediately before the date the individual becomes an institutionalized individual... or the date the individual applies for such assistance while an institutionalized individual, disposed of resources for less than fair market value.'
The Omnubus Budget Reconciliation Act of 1993 (OBRA '93) mandated changes in the treatment of transfers of property occurring on or after August 11, 1993. ORBA '93 changed Section 1917 of the Social Security Act to require a look-back period of 36 months for all transfers and 60 months for transfers involving trusts. It removed the 30-month maximum on the length of the period of ineligibility, replacing it with an unlimited penalty period. Penalties for multiple transfers were changed to run consecutively rather than concurrently.
Beginning August 11, 1993, nursing facility benefits (vendor level of care) and HCB services must be denied to individuals who have transferred resources for less than fair market value within 36 months (60 months for transfers involving trusts) prior to the date the claimant is first institutionalized and has applied for or is receiving Medicaid. Institutionalized individual for transfer-of-property purposes means a claimant who has entered a Medicaid certified bed in a nursing facility (NF), ICF-MR, Mental Hospital at least age 65 or under age 21, or entry into the Personal Care Services program. All further references in the Transfer of Property policy to vendor benefits or institutionalization apply to any type of vendor facility and to HCB services.
NOTE: Transfers that occur on or after July 1, 1989, for non-institutionalized individuals will NOT render claimants ineligible for current assistance. However, explore these types of transfers at the time of application. Should the claimant later become institutionalized, these provisions apply.
NOTE: Consider a transfer of the home to persons other than those listed above as a transfer of property. The home includes all adjoining acreage. Evaluate these cases to determine if fair and valuable consideration was received.
'Property Transfer' is a situation in which property (including cash and securities) has been sold, traded, or given away. It does not include the mere addition of a name to a bank account, loss of property due to foreclosure, defunct sales contracts, or repossessed property (real or personal) by seller or lending agent due to claimant's failure to pay.
A transfer of property occurs when the person making the transfer (grantor) has deeded over the property, and the deed or other instrument is no longer in the physical possession of the grantor.
A transfer of property occurs when a claimant, or the spouse with whom the claimant lives, consigns property or a share in property owned through 'tenancy in common' or 'joint tenancy' or commonly owned with a person(s) other than the spouse to the co-owner(s).
EXAMPLE: Mr. Jones is the claimant. His wife and sister-in-law share 1/2 interest each in a piece of property in which the sister-in-law lives. Mr. Jones' wife signs her 1/2 interest over to her sister. This would be considered a transfer of property.
Any personal property such as grain, produce, livestock, etc. sold at regular market prices and shown on the budget as income is not considered as 'property transfer'.
'Fair and Valuable Consideration' means money, real or personal property, or services received from the person(s) to whom the property was transferred is equal to approximate market value at the time of transfer. "At the time of transfer" will mean the date on which the property was conveyed or within 30 days of that date.
EXAMPLE: Ms. Jones owns a house for which she received an offer of $5,000.00 from a real estate agency. She sells the house to her brother for $4,700.00. To pay for the house, he gives her a car valued at $2,300.00, and $2,400.00 in cash. This is considered fair and valuable consideration.
Certain types of contracts the applicant/participant is a party to may have an effect on the eligibility determination for MO HealthNet in relation to income, resources, and transfer of property requirements. For purposes of determining MO HealthNet eligibility, all contracts the applicant/participant is a party to must be reviewed and identified as being a Promise to Pay, a Promissory Note, or a Property Agreement.
NOTE: If there is no legal restriction against converting the contract into cash, or against selling it, the promissory note is considered negotiable. Assume, absent evidence to the contrary, that the written agreement is bona fide, negotiable, and may be sold.
Obtain a complete copy of the finalized agreement. If it is a verbal agreement between the lender and borrower, obtain a written attestation from the borrower.
Review the agreement for the following information:
Determine the resource value of the agreement by following the resource determination found in the sections below depending on the type of agreement. If the outstanding principal balance combined with other resources causes ineligibility, inform the applicant/participant of the resource value that will be used. If information is provided from a knowledgeable source verifying a lower value, the lower value should be used.
Knowledgeable sources include anyone in the business of making estimates such as banks, other financial institutions, private investors, real estate brokers, or can be an offer made in good faith to purchase the agreement.
A promise to pay may be in the form of an oral or written agreement, and is considered an unconditional agreement whereby one party promises to pay a specified sum of money at a specified time (or on demand) to another party. It may be given in return for goods, money loaned, or services rendered. If the applicant/participant indicates the promise to pay is an oral agreement, he/she must provide a detailed written explanation of the date of the agreement, the original loan amount, and repayment schedule.
An oral or written 'promise to pay' received at the time the property is transferred is acceptable as fair and valuable consideration provided the claimant can prove:
EXAMPLE: Acceptable Promise to Pay
In April, Mr. Smith sold his house for $5,500.00, which was the market value, to his nephew. His nephew had a $5,000.00 time certificate that would not mature until October. Mr. Smith and his nephew agreed the nephew would pay Mr. Smith $500.00 immediately and the remaining $5,000.00 in October when the time certificate matured.
If the promise to pay is a written agreement which indicates the borrower will have assets to repay the debt on a future date, a copy of the finalized contract must be provided and must verify:
A 'beneficial interest', received at the time the property is transferred, is acceptable as fair and valuable consideration.
EXAMPLE: Mr. Smith wants to buy a home but, because of his age, he cannot get a loan. He gives his son the amount of money he had for a down payment ($3,000.00). His son secures the loan and buys the house. The deed is in the son's name. However, Mr. Smith makes the payments and lives in the home. Therefore, although Mr. Smith's son holds the legal title to the property, Mr. Smith has the 'beneficial interest' in the property. This would not be considered a transfer of property. The equity in the property belongs to Mr. Smith, and not his son.
If a situation like the one described in the previous example encountered, send a summary of the pertinent information (copy of the deed, claimant's statement, etc.) through normal supervisory channels.
The IM Policy unit may obtain an opinion from Legal Section. Take no action based on this factor until the decision is received from the IM Policy unit.
An 'institutionalized individual' is an inpatient in a nursing facility, or who is an inpatient in a medical institution for whom payment is or would be made based on level of care provided in a nursing facility. This includes all claimants, who are in a medicaid certified bed in a NF, ICF-MR, Mental Hospital at least age 65 or under age 21, or in the Personal Care Services program.
The spouse of an institutionalized individual is the 'community spouse'. Included in this definition is further limited to the 'spouse with whom the claimant is living'. Apply the transfer of property policy to the spouse only if the spouse was married to and living with the claimant at the time of the transfer. This also includes cases where there is involuntary separation because one member of the couple is out of the home for purposes of receiving medical or nursing home care.
The "look-back date" is the earliest date a transfer could have been made and still be considered in determining eligibility. The "look-back period" is the entire period between the look-back date and the application for vendor benefits.
After OBRA '93, each person who applies for Medicaid and is institutionalized has exactly one "look-back date" which never changes. The look-back date is generally 36 months prior to the date the claimant is first institutionalized and has applied for or is receiving Medicaid. For "Transfers accomplished through trusts or annuities" for when the look-back date is 60 months, refer to Section 1040.020.05.05. However, the post-OBRA look-back date may be no earlier than August 11, 1993. The look-back date for all vendor or HCB recipients who were active on August 11, 1993, will always be August 11, 1993. If a claimant has more than one period of institutionalization, the look-back date does not change.