The North Carolina legislature has approved a bill that allows life estates to be counted in determining an individual's Medicaid eligibility. The new policy, approved as part of the new state budget (Senate Bill 622), takes effect October 1.
The state recently documented 16 cases totaling nearly $2 million in which people used life estates to qualify for Medicaid, according to the Associated Press.
Medicaid paid more than $896 million in nursing home care last year for 43,000 people in North Carolina, according to the state Health and Human Services department.
Following is the text of the pertinent section of the budget bill (found on page 123). For the full text, go to: https://www.ncga.state.nc.us/Sessions/2005/Bills/Senate/PDF/S622v9.pdf
"SECTION 10.11.(t) For the purposes of determining eligibility for Medical Assistance, the Department of Health and Human Services may apply federal transfer of assets policies, as described in Title XIX, section 1917(c) of the Social Security Act, including the attachment of liens, to (i) life estates purchased by or on behalf of the recipient, other than life estates excluded from countable resources under this section, and (ii) to real property excluded as "income producing", tenancy-in-common, or as nonhomesite property made "income producing" under Title XIX, section 1902(r)(2) of the Social Security Act. The transfer of assets policy shall apply only to an institutionalized individual or the individual's spouse as defined in Title XIX, section 1917(c) of the Social Security Act. The Department shall exclude from countable resources any life estate in real property that is in the recipient's home, is measured by the recipient's life, and is the result of the transfer of a remainder interest.
"Federal transfer of assets policies applied to "income producing" real property under Title XIX, section 1902(r)(2) of the Social Security Act shall become effective not earlier than October 1, 2001. Federal transfer of assets policies and attachment of liens applied to real property excluded as tenancy-in-common, or as nonhomesite property made "income producing" in accordance with this subsection shall become effective not earlier than November 1, 2002. Federal transfer of assets policies applied to life estates in accordance with this subsection shall become effective not earlier than October 1, 2005."
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