Excess home equity
Section 6014 of the Deficit Reduction Act (DRA) of 2005 included a new provision which is a limitation on the payment of LTC services (Medicaid services in a medical institution or a Home and Community Based Waiver). The DRA states "this applies to individuals who are determined eligible for Medicaid with respect to nursing facility or other long-term care services."
ACES information regarding excess home equity programming
Promoted 4/1/2007 Note: Information indicated here until ACES manual is updated with processing instructions.
CR 403962 – Home Equity Value Exceeds $552,000
In order to comply with the requirements of the Federal Deficit Reduction Act of 2006, Aging and Disabilities Administration (ADSA) requests that ACES support a new federal rule which states that any individual with an equity value of $552,000 or more in their primary residence be disqualified from receiving Long Term Care (LTC) services unless certain criteria are met.
The new $552,000 home equity limits apply to:
- All C, K, and L-track coverage groups.
- All individuals who apply for LTC coverage on or after 05/01/06.
- All LTC recipients who applied on or after 05/01/06 and have accrued home equity of more than $552,000.
- Any LTC individual who has a break from receiving LTC services after 05/01/06 that is greater than 30 days.
The new $552,000 home equity limit does not apply to individuals who applied for or were receiving LTC services prior to 05/01/06 and have not had a break in service greater than 30 days since 05/01/06.
The following criteria shall exempt a primary residence from the new equity limit rule:
- A spouse, dependent minor or disabled adult child are living in the home;
- The home is essential for self-support; or
- The individual would suffer undue hardship due to application of the rule, such as a legal impediment to selling the home or otherwise accessing the home equity.
Eligibility related to the equity value limit for LTC individuals receiving services under the MNIW, MNRW, and MN Hospice programs will need to be determined by the user. These individuals are currently receiving LTC services under S99, G95 or G99 coverage types as a processing alternative.
- The existing HCCP/MPC Date field was renamed Apprvl Dt, and the Plan Apprvl Src field was renamed Apprvl Src.
- A new HCB End date field was added for users to record the date that HCB waivered services ended for an individual.
- A new Equity Value Amount field was added. This field displays the system calculated equity value. The system calculated value will be the difference between the FMV Amount and the Encumbrance Amount.
- Two new Property Type valid value codes were created to identify exempt property:
- ES – Essential to Self-Support
- HW – Hardship Waiver Approved
Eligibility Review Processing Changes:
- Workers will be required to update the Real Property Type, FMV Amount, Encumbrance Amount and the associated verification codes for any real property type coded on (RES2) screen prior to competing the recertification of a LTC AU.
- Workers will be required to confirm the existing exemptions still applied during application and review processing.
New Reason Code:
- Reason Code 410 – Excess Home Equity – LTC will be used to designate that an individual has been denied or terminated when the calculated equity value is in excess of $552,000.
- The following text and WAC reference will display on Letter 006-01 (Termination for AU) and Letter 004-03 (Denial for AU) when an AU is denied or terminated with new Reason Code 410:Excess Home Equity – Long Term Care
You don’t qualify for Long Term Care services because the equity in your home is over the limit. You may receive services if we approve an undue hardship waiver. We approve hardship waivers when you can show that without services:
- You will be deprived of housing, food, clothing or medical care, and
- Your life or health will be endangered.
Your request must:
- Tell us in writing the reason you need an undue hardship waiver.
- Be signed and returned within days of the date of denial or termination of services.
- Include the name, address and telephone number of the person writing the request.
You may authorize your representative, guardian, or facility where you live to file an undue hardship waiver request for you. See WAC rule 182-513-1367 Aces.online:Re
- Client >> Resource page: A new “Equity Amount” field was added to display the new calculated value.
- Client >> Institution page: A new “End Date” field was added to display the HCB/MPC Services end date.
- Users will receive edit 2206 - home equity denial for LTC SVCS only. Determine Medicaid eligibility on the (ELIG) screen when an individual is denied or terminated with Reason Code 410 – Excess Home Equity – LTC.
- Users will also receive edit 2205 - HCB/MPC Services end date cannot be prior to approval date on the (INST) screen if the HCB/MPC end date is prior to the begin date.