Part 15. TEXAS HEALTH AND HUMAN SERVICES COMMISSION
Chapter 358. MEDICAID ELIGIBILITY
Subchapter D. RESOURCES
The Texas Health and Human Services Commission (HHSC) adopts an amendment to §358.432, concerning Home Equity Treatment and adopts new §358.444, concerning Medicaid Treatment of Qualified Long-Term Care Partnership Program Insurance Policies. Section 358.444 is adopted without changes to the proposed text as published in the December 28, 2007, issue of the Texas Register (32 TexReg 9892) and will not be republished. New §358.432 is adopted with one minor correction to delete the word "or" erroneously included in subsection (b)(2). The text of the rule will be republished.
Background and Justification
The amendment to Chapter 358 was undertaken as a result of Section 2, Senate Bill 22, 80th Legislature, Regular Session, 2007, to be consistent with Section 6024 of the federal Deficit Reduction Act of 2005 (Pub. L. No. 1096-171). These amendments implement a Long-Term Care Partnership Program which will enable individuals who purchase certain approved private long-term care insurance policies to have a dollar-for-dollar exclusion of their resources in an amount equal to the insurance benefits paid on behalf of the individual in determining eligibility for medical assistance.
The Health and Human Services Council voted to support the adoption of the proposed rule and amendments at its February 29, 2008 meeting.
HHSC held a public hearing on January 14, 2008. One individual, an insurance and investment broker representing himself, testified in support of the proposed rules.
Comments and Responses
HHSC received comments on the amendment from two advocacy groups - the Texas Legal Services Center and the National Academy of Elder Law Attorneys (NAELA), as well as comments from two individual attorneys. A summary of the comments and HHSC's responses follow.
Comment: Two commenters stated that the proposed rule changes do not mention the Medicaid Estate Recovery Program (MERP). A related comment was that the proposed rules fail to include the dollar-for-dollar exemption for MERP provided in the Deficit Reduction Act of 2005 (DRA). Another commenter stated that the rule must address estate recovery.
Response: HHSC has made no changes to the proposed rules because of the comments. The new rule and amendments address only the Medicaid eligibility issues related to the program. Issues of Medicaid Estate Recovery are addressed in the Department of Aging and Disability Services (DADS) Medicaid Estate Recovery rules.
Comment: Two commenters stated that the agency should expand the language "receives additional resources" in §358.444(3)(C) to "receives or acquires any additional countable resources, except that a disregard as set forth in this section cannot offset or reduce an individual's equity interest in the individual's home which exceeds $500,000 pursuant to §358.432(e) of this title" to avoid confusion within the agency as well as with the public, to develop confidence in the new program, to avoid conflict, for judicial economy and to avoid lawsuits. In a related comment, an individual stated that the agency should clarify the phrase "receives additional resources" in §358.444(3)(C) to "additional countable resources" to avoid confusion within the agency as well as with the public, to avoid conflict, for judicial economy and to avoid lawsuits.
Response: HHSC has made no changes to the proposed rules because of the comments. Section 358.444(1)(D) defines the "resource disregard" as the total equity value of non-exempt resources (under rules governing Medicaid eligibility) that are disregarded in determining eligibility for Medicaid and this definition in the proposed rule addresses the concerns raised by the commenters. In addition, the proposed amendment to §358.432 Home Equity Treatment, in particular §358.432(e), already states that the Long-Term Care Partnership disregard cannot offset or reduce such a home equity interest, so no further clarification is needed.
The amendment and new rule are adopted under the Texas Government Code, §531.033, which provides the Executive Commissioner of HHSC with broad rulemaking authority; the Human Resources Code, §32.021 and the Texas Government Code, §531.021(a), which provide HHSC with the authority to administer the federal medical assistance (Medicaid) program in Texas.
§358.432.Home Equity Treatment.
(a) For individuals who are determined eligible for medical assistance with respect to nursing facility services or other long-term care services as described in the Social Security Act (SSA) §1917(c)(1) (codified at 42 U.S.C 1396p(c)(1)) based on an application filed on or after January 1, 2006--
(1) Despite any other provision of the Social Security Act (SSA) §1917 (codified at 42 U.S.C 1396p), subject to paragraph (2) of this subsection and subsection (b) of this section, the individual shall not be eligible for such assistance if the individual's equity interest in the individual's home exceeds $500,000.
(2) The dollar amounts specified in this paragraph shall be increased, beginning with 2011, from year to year based on the percentage increase in the consumer price index for all urban consumers (all items; United States city average), rounded to the nearest $1,000.
(b) Subsection (a) of this section shall not apply with respect to an individual if--
(1) The spouse of such individual, or
(2) Such individual's child who is under age 21, or is blind or permanently and totally disabled as defined in SSA §1614 (codified at 42 U.S.C 1382c), is lawfully residing in the individual's home.
(c) Nothing in this section shall be construed as preventing an individual from using a reverse mortgage or home equity loan to reduce the individual's total equity interest in the home.
(d) HHSC may waive subsection (a) of this section in the case of demonstrated hardship consistent with the guidelines set forth by the Secretary of the United States Department of Health and Human Services.
(e) A Long-Term Care Partnership Program disregard set forth in §358.444 of this title (relating to Medicaid Treatment of Qualified Long Term Care Partnership Program Insurance Policies) cannot offset or reduce home equity interest for the purposes of subsection (a)(1) of this section.
This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on April 2, 2008.
TRD-200801732
Steve Aragón
Chief Counsel
Texas Health and Human Services Commission
Effective date: April 22, 2008
Proposal publication date: December 28, 2007
For further information, please call: (512) 424-6900