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Medicaid Permits Nursing Home Recipients to Maintain Their Home

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by Alison Hirschel, MPLP Elder Law Attorney

Pursuant to 42 CFR 435.725(d), states may permit Medicaid funded nursing home residents to use their incomes to maintain their homes for up to six months instead of paying the majority of their incomes to their nursing homes as their patient cost of care. Advocates have persuaded the state Medical Services Administration to adopt this provision. The policy is important because most low income individuals are unable to make mortgage payments or pay rent, utilities, taxes, and other housing expenses necessary to maintain their homes while they are institutionalized. If they lose their housing while they are in the nursing home, they often lose all their possessions as well because they are unable to arrange and pay for the storage of their belongings. Moreover, it can be extremely difficult for residents to find new accessible and affordable housing once they lose their homes. Thus, residents who only intended to be in the nursing home for rehabilitation or until circumstances changed that would permit them to go home end up being stuck in nursing homes permanently after the loss of their homes. Under the new policy, Medicaid recipients whose doctors certify that they are likely to be able to go home within six months will be permitted to use their income to pay for the housing expenses they document for the Department of Human Services; their patient pay amount (the amount of income they are required to contribute to their cost of care) will be adjusted to reflect the housing allowance.

The policy was originally going to become effective on October 1. However, DHS officials determined that its new computer system could not be adapted to include this provision. Advocates then succeeded in persuading DHS officials that case workers could calculate the housing allowance by hand, as they do for medical expense deductions from patient cost of care calculations. DCH staff are now working on developing the necessary forms and training and refining the final policy. Although advocates are still pressing for a January 1, 2009 implementation date, DCH officials recently announced they did not expect the policy to be implemented until April 1, 2009. Medicaid Director Paul Reinhart has indicated his intention to apply the policy liberally so that it would apply to residents whose doctors certify they are likely to be able to leave the facility within six months of whenever Medicaid becomes the primary payer for their stay rather than restricting the policy to short stay residents who are likely to leave the facility within six months of admission. In addition, he clarified that the policy will apply to both tenants and homeowners.

If you are aware of clients in nursing homes who are at risk of losing their homes before April 1 because of their Medicaid patient pay obligations, please contact Alison Hirschel at hirschel@umich.edu.