PROTECTION OF INCOME AND RESOURCES OF COUPLE FOR MAINTENANCE OF COMMUNITY SPOUSE.

SEC. 303. PROTECTION OF INCOME AND RESOURCES OF COUPLE FOR MAINTENANCE OF COMMUNITY SPOUSE. (a) In General.— (1) Title XIX, as amended by the amendment made by section 411(k)(6)(B) of this Act, is amended— (A) by redesignating section 1924 as section 1925, and (B) by inserting after section 1923 the following new section: “treatment of income and resources for certain institutionalized spouses “Sec. 1924 . (a) Special Treatment for Institutionalized Spouses.— “(1) Supersedes other provisions.—In determining the eligibility for medical assistance of an institutionalized spouse (as defined in subsection (h)(1)), the provisions of this section supersede any other provision of this title (including sections 1902(a)(17) and 1902(f)) which is inconsistent with them. “(2) No comparable treatment required.—Any different treatment provided under this section for institutionalized spouses shall not, by reason of paragraph (10) or (17) of section 1902(a), require such treatment for other individuals. “(3) Does not affect certain determinations.— Except as this section specifically provides, this section does not apply to— “(A) the determination of what constitutes income or resources, or “(B) the methodology and standards for determining and evaluating income and resources. “(4) Application in certain states and territories.— “(A) Application in states operating under demonstration projects.—In the case of any State which is providing medical assistance to its residents under a waiver granted under section 1115, the Secretary shall require the State to meet the requirements of this section in the same manner as the State would be required to meet such requirement if the State had in effect a plan approved under this title. “(B) No application in commonwealths and territories.—This section shall only apply to a State that is one of the 50 States or the District of Columbia. “(b) Rules for Treatment of Income.— “(1) Separate treatment of income.—During any month in which an institutionalized spouse is in the institution, except as provided in paragraph (2), no income of the community spouse shall be deemed available to the institutionalized spouse. “(2) Attribution of income.— In determining the income of an institutionalized spouse or community spouse, after the 102 STAT. 755institutionalized spouse has been determined to be eligible for medical assistance, except as otherwise provided in this section and regardless of any State laws relating to community property or the division of marital property, the following rules apply: “(A) Non-trust property.— Subject to subparagraphs (C) and (D), in the case of income not from a trust, unless the instrument providing the income otherwise specifically provides— “(i) if payment of income is made solely in the name of the institutionalized spouse or the community spouse, the income shall be considered available only to that respective spouse; “(ii) if payment of income is made in the names of the institutionalized spouse and the community spouse, one-half of the income shall be considered available to each of them; and “(iii) if payment of income is made in the names of the institutionalized spouse or the community spouse, or both, and to another person or persons, the income shall be considered available to each spouse in proportion to the spouse’s interest (or, if payment is made with respect to both spouses and no such interest is specified, one-half of the joint interest shall be considered available to each spouse). “(B) Trust property.— In the case of a trust— “(i) except as provided in clause (ii), income shall be attributed in accordance with the provisions of this title (including sections 1902(a)(17) and 1902(k)), and “(ii) income shall be considered available to each spouse as provided in the trust, or, in the absence of a specific provision in the trust— “(I) if payment of income is made solely to the institutionalized spouse or the community spouse, the income shall be considered available only to that respective spouse; “(II) if payment of income is made to both the institutionalized spouse and the community spouse, one-half of the income shall be considered available to each of them; and “(III) if payment of income is made to the institutionalized spouse or the community spouse, or both, and to another person or persons, the income shall be considered available to each spouse in proportion to the spouse’s interest (or, if payment is made with respect to both spouses and no such interest is specified, one-half of the joint interest shall be considered available to each spouse). “(C) Property with no instrument.—In the case of income not from a trust in which there is no instrument establishing ownership, subject to subparagraph (D), one-half of the income shall be considered to be available to the institutionalized spouse and one-half to the community spouse. “(D) Rebutting ownership.—The rules of subparagraphs (A) and (C) are superseded to the extent that an institutionalized spouse can establish, by a preponderance of the 102 STAT. 756evidence, that the ownership interests in income are other than as provided under such subparagraphs. “(c) Rules for Treatment of Resources.— “(1) Computation of spousal share at time of institutionalization.— “(A) Total joint resources.— There shall be computed (as of the beginning of a continuous period of institutionalization of the institutionalized spouse)— “(i) the total value of the resources to the extent either the institutionalized spouse or the community spouse has an ownership interest, and “(ii) a spousal share which is equal to Ms of such total value. “(B) Assessment.—At the request of an institutionalized spouse or community spouse, at the beginning of a continuous period of institutionalization of the institutionalized spouse and upon the receipt of relevant documentation of resources, the State shall promptly assess and document the total value described in subparagraph (A)(i) and shall provide a copy of such assessment and documentation to each spouse and shall retain a copy of the assessment for use under this section. If the request is not part of an application for medical assistance under this title, the State may, at its option as a condition of providing the assessment, require payment of a fee not exceeding the reasonable expenses of providing and documenting the assessment. At the time of providing the copy of the assessment, the State shall include a notice indicating that the spouse has right to a fair hearing under subsection (e)(2)(E) with respect to the determination of the community spouse resource allowance, to provide for an allowance adequate to raise the spouse’s income to the minimum monthly maintenance needs allowance. “(2) Attribution of resources at time of initial eligibility determination.— In determining the resources of an institutionalized spouse at the time of application for benefits under this title, regardless of any State laws relating to community property or the division of marital property— “(A) except as provided in subparagraph (B), all the resources held by either the institutionalized spouse, community spouse, or both, shall be considered to be available to the institutionalized spouse, and “(B) resources shall not be considered to be available to an institutionalized spouse, to the extent that the amount of such resources does not exceed the amount computed under subsection (f)(2)(A) (as of the time of application for benefits). “(3) Assignment of support rights.— The institutionalized spouse shall not be ineligible by reason of resources determined under paragraph (2) to be available for the cost of care where— “(A) the institutionalized spouse has assigned to the State any rights to support from the community spouse; “(B) the institutionalized spouse lacks the ability to execute an assignment due to physical or mental impairment but the State has the right to bring a support proceeding against a community spouse without such assignment; or 102 STAT. 757 “(C) the State determines that denial of eligibility would work an undue hardship. “(4) Separate treatment of resources after eligibility for benefits established.—During the continuous period in which an institutionalized spouse is in an institution and after the month in which an institutionalized spouse is determined to be eligible for benefits under this title, no resources of the community spouse shall be deemed available to the institutionalized spouse. “(5) Resources defined.— In this section, the term ‘resources’ does not include— “(A) resources excluded under subsection (a) or (d) of section 1613, and “(B) resources that would be excluded under section 1613(a)(2)(A) but for the limitation on total value described in such section. “(d) Protecting Income for Community Spouse.— “(1) Allowances to be offset from income of institutionalized spouse.— After an institutionalized spouse is determined to be eligible for medical assistance, in determining the amount of the spouse’s income that is to be applied monthly to payment for the costs of care in the institution, there shall be deducted from the spouse’s monthly income the following amounts in the following order: “(A) A personal needs allowance (described in section 1902(q)(1)), in an amount not less than the amount specified in section 1902(q)(2). “(B) A community spouse monthly income allowance (as defined in paragraph (2)), but only to the extent income of the institutionalized spouse is made available to (or for the benefit of) the community spouse. “(C) A family allowance, for each family member, equal to at least Vs of the amount by which the amount described in paragraph (3)(A)(i) exceeds the amount of the monthly income of that family member. “(D) Amounts for incurred expenses for medical or remedial care for the institutionalized spouse (as provided under section 1902(f)). In subparagraph (C), the term ‘family member’ only includes minor or dependent children, dependent parents, or dependent siblings of the institutionalized or community spouse who are residing with the community spouse. “(2) Community spouse monthly income allowance defined.— In this section (except as provided in paragraph (5)), the ‘community spouse monthly income allowance’ for a community spouse is an amount by which— “(A) except as provided in subsection (e), the minimum monthly maintenance needs allowance (established under and in accordance with paragraph (3)) for the spouse, exceeds “(B) the amount of monthly income otherwise available to the community spouse (determined without regard to such an allowance). “(3) Establishment of minimum monthly maintenance needs allowance.— “(A) In general.— Each State shall establish a minimum monthly maintenance needs allowance for each community 102 STAT. 758 spouse which, subject to subparagraph (Q, is equal to or exceeds— “(i) the applicable percent (described in subparagraph (B)) of 1/12 of the nonfarm income official poverty fine (defined by the Office of Management and Budget and revised annually in accordance with sections 652 and 673(2) of the Omnibus Budget Reconciliation Act of 1981) for a family unit of 2 members; plus “(ii) an excess shelter allowance (as defined in paragraph (4)). A revision of the official poverty line referred to in clause (i) shall apply to medical assistance furnished during and after the second calendar quarter that begins after the date of publication of the revision. “(B) Applicable percent.— For purposes of subparagraph (A)(i), the ‘applicable percent’ described in this paragraph, effective as of— “(i) September 30, 1989, is 122 percent, “(ii) July 1, 1991, is 133 percent, and “(iii) July 1, 1992, is 150 percent. “(C) Cap on minimum monthly maintenance needs allowance.—The minimum monthly maintenance needs allowance established under subparagraph (A) may not exceed $1,500 (subject to adjustment under subsections (e) and (g)). “(4) Excess shelter allowance defined.— In paragraph (3)(A)(ii), the term ‘excess shelter allowance’ means, for a community spouse, the amount by which the sum of— “(A) the spouse’s expenses for rent or mortgage payment (including principal and interest), taxes and insurance and, in the case of a condominium or cooperative, required maintenance charge, for the community spouse’s principal residence, and “(B) the standard utility allowance (used by the State under section 5(e) of the Food Stamp Act of 1977) or, if the State does not use such an allowance, the spouse’s actual utility expenses, exceeds 30 percent of the amount described in paragraph (3)(A)(i), except that, in the case of a condominium or cooperative, for which a maintenance charge is included under subparagraph (A), any allowance under subparagraph (C) shall be reduced to the extent the maintenance charge includes utility expenses. “(5) Court ordered support.—If a court has entered an order against an institutionalized spouse for monthly income for the support of the community spouse, the community spouse monthly income allowance for the spouse shall be not less than the amount of the monthly income so ordered. “(e) Notice and Fair Hearing.— “(1) Notice.— Upon— “(A) a determination of eligibility for medical assistance of an institutionalized spouse, or “(B) a request by either the institutionalized spouse, or the community spouse, or a representative acting on behalf of either spouse, each State shall notify both spouses (in the case described in subparagraph (A)) or the spouse making the request (in the case 102 STAT. 759 described in subparagraph (B)) of the amount of the community spouse monthly income allowance (described in subsection (d)(1)(B)), of the amount of any family allowances (described in subsection (d)(1)(C)), of the method for computing the amount of the community spouse resources allowance permitted under subsection (f), and of the spouse’s right to a fair hearing under this subsection respecting ownership or availability of income or resources, and the determination of the community spouse monthly income or resource allowance. “(2) Fair hearing.— “(A) In general.— If either the institutionalized spouse or the community spouse is dissatisfied with a determination of— “(i) the community spouse monthly income allowance; “(ii) the amount of monthly income otherwise available to the community spouse (as applied under subsection (d)(2)(B)); “(iii) the computation of the spousal share of resources under subsection (c)(1); “(iv) the attribution of resources under subsection (c)(2); or “(v) the determination of the community spouse resource allowance (as defined in subsection (f)(2)); such spouse is entitled to a fair hearing described in section 1902(a)(3) with respect to such determination. Any such hearing respecting the determination of the community spouse resource allowance shall be held within 30 days of the date of the request for the hearing. “(B) Revision of minimum monthly maintenance needs allowance.—If either such spouse establishes that the community spouse needs income, above the level otherwise provided by the minimum monthly maintenance needs allowance, due to exceptional circumstances resulting in significant financial duress, there shall be substituted, for the minimum monthly maintenance needs allowance in subsection (d)(2)(A), an amount adequate to provide such additional income as is necessary. “(C) Revision of community spouse resource allowance.—If either such spouse establishes that the community spouse resource allowance (in relation to the amount of income generated by such an allowance) is inadequate to raise the community spouse’s income to the minimum monthly maintenance needs allowance, there shall be substituted, for the community spouse resource allowance under subsection (f)(2), an amount adequate to provide such a minimum monthly maintenance needs allowance. “(f) Permitting Transfer of Resources to Community Spouse.— “(1) In general.—An institutionalized spouse may, without regard to section 1917, transfer to the community spouse (or to another for the sole benefit of the community spouse) an amount equal to the community spouse resource allowance (as defined in paragraph (2)), but only to the extent the resources of the institutionalized spouse are transferred to (or for the sole benefit of) the community spouse. The transfer under the preceding sentence shall be made as soon as pacticable after the date of the initial determination of eligibility, taking into ac-102 STAT. 760count such time as may be necessary to obtain a court order under paragraph (3). “(2) Community spouse resource allowance defined.— In paragraph (1), the ‘community spouse resource allowance’ for a community spouse is an amount (if any) by which— “(A) the greatest of— “(i) $12,000 (subject to adjustment under subsection (g)), or, if greater (but not to exceed the amount specified in clause (ii)(II) an amount specified under the State plan, “(ii) the lesser of (I) the spousal share computed under subsection (c)(1), or (II) $60,000 (subject to adjustment under subsection (g)), “(iii) the amount established under subsection (e)(2); or “(iv) the amount transferred under a court order under paragraph (3); exceeds “(B) the amount of the resources otherwise available to the community spouse (determined without regard to such an allowance). “(3) Transfers under court orders.—If a court has entered an order against an institutionalized spouse for the support of the community spouse, section 1917 shall not apply to amounts of resources transferred pursuant to such order for the support of the spouse of a family member (as defined in subsection (d)(1)). “(g) Indexing Dollar Amounts.—For services furnished during a calendar year after 1989, the dollar amounts specified in subsections (d)(3)(C), (f)(2)(A)(i), and (f)(2)(A)(ii)(II) shall be increased by the same percentage as the percentage increase in the consumer price index for all urban consumers (all items; U.S. city average) between September 1988 and the September before the calendar year involved. “(h) Definitions.— In this section: “(1) The term ‘institutionalized spouse’ means an individual who— “(A) is in a medical institution or nursing facility or who (at the option of the State) is described in section 1902(a)(10)(A)(ii)(VI), and “(B) is married to a spouse who is not in a medical institution or nursing facility; but does not include any such individual who is not likely to meet the requirements of subparagraph (A) for at least 30 consecutive days. “(2) The term ‘community spouse’ means the spouse of an institutionalized spouse.”. (2) Section 1919(c)(1)(B)(i) (42 U.S.C. 1396r(c)(1)(B)(i)) is amended by inserting “and of the requirements and procedures for establishing eligibility for medical assistance under this title, including the right to request an assessment under section 1924(c)(1)(B)” before the semicolon. (b) Taking Into Account Certain Transfers of Assets.—Subsection (c) of section 1917 (42 U.S.C. 1396p) is amended to read as follows: “(c) (1) In order to meet the requirements of this subsection (for purposes of section 1902(a)(51)(B)), the State plan must provide for a 102 STAT. 761period of ineligibility in the case of an institutionalized individual (as defined in paragraph (3)) who, at any time during the 30-month period immediately before the individual’s application for medical assistance under the State plan, disposed of resources for less than fair market value. The period of ineligibility shall begin with the month in which such resources were transferred and the number of months in such period shall be equal to the lesser of— “(A) 30 months, or “(B) (i) the total uncompensated value of the resources so transferred, divided by (ii) the average cost, to a private patient at the time of the application, of nursing facility services in the State or, at State option, in the community in which the individual is institutionalized. “(2) An individual shall not be ineligible for medical assistance by reason of paragraph (1) to the extent that— “(A) the resources transferred were a home and title to the home was transferred to— “(i) the spouse of such individual; “(ii) a child of such individual who is under age 21, or (with respect to States eligible to participate in the State program established under title )(VI) is blind or permanently and totally disabled, or (with respect to States which are not eligible to participate in such program) is blind or disabled as defined in section 1614; “(iii) a sibling of such individual who has an equity interest in such home and who was residing in such individual’s home for a period of at least one year immediately before the date of the individual’s admission to the medical institution or nursing facility, or “(iv) a son or daughter of such individual (other than a child described in clause (ii)) who was residing in such individual’s home for a period of at least two years immediately before the date of such individual’s admission to the medical institution or nursing facility, and who (as determined by the State) provided care to such individual which permitted such individual to reside at home rather than in such an institution or facility; “(B) the resources were transferred to (or to another for the sole benefit of) the community spouse, as defined in section 1924(h)(2), or the individual’s child who is blind or permanently and totally disabled; “(C) a satisfactory showing is made to the State (in accordance with any regulations promulgated by the Secretary) that (i) the individual intended to dispose of the resources either at fair market value, or for other valuable consideration, or (ii) the resources were transferred exclusively for a purpose other than to qualify for medical assistance; or “(D) the State determines that denial of eligibility would work an undue hardship. “(3) In this subsection, the term ‘institutionalized individual’ means an individual who is an inpatient in a medical institution or nursing facility. “(4) A State (including a State which has elected treatment under section 1902(f)) may not provide for any period of ineligibility for an individual due to transfer of resources for less than fair market value except in accordance with this subsection.”. 102 STAT. 762 (c) New SSI Policy Regarding Disposal of Resources for Less Than Fair Market Value.— (1) Elimination of ssi penalty; notification of medicaid policy limiting eligibility of institutionalized individuals for benefits based on such disposal of resources.—Subsection (c) of section 1613 (42 U.S.C. 1382b) is amended to read as follows: “Notification of Medicare Policy Restricting Eligibility of Institutionalized Individuals for Benefits Based on Disposal of Resources for Less Than Fair Market Value “(c)(1) At the time an individual (and the individual’s eligible spouse, if any) applies for benefits under this title, and at the time the eligibility of an individual (and such spouse, if any) for such benefits is redetermined, the Secretary shall— “(A) inform such individual of the provisions of section 1917(c) providing for a period of ineligibility for benefits under title )(I)( for individuals who make certain dispositions of resources for less than fair market value, and inform such individual that information obtained pursuant to subparagraph (B) will be made available to the State agency administering a State plan under title XIX (as provided in paragraph (2)); and “(B) obtain from such individual information which may be used by the State agency in determining whether or not a period of ineligibility for such benefits would be required by reason of section 1917(c) if such individual (or such spouse, if any) enters a medical institution or nursing facility. “(2) The Secretary shall make the information obtained under paragraph (1)(B) available, on request, to any State agency administering a State plan approved under title XIX.”. (2) Conforming amendment.—Subparagraph (B) of section 1611(e)(1)(42 U.S.C. 1382(e)(1)) is amended by adding after and below clause (iii) the following new sentence: “For purposes of this subsection, a hospital, extended care facility, nursing home, or intermediate care facility which is a ‘medical institution or nursing facility’ within the meaning of section 1917(c) shall be considered to be receiving payments with respect to an individual under a State plan approved under title )(I)( during any period of ineligibility of such individual provided for under the State plan pursuant to section 1917(c).”. (d) Disregarding Payments for Certain Medical Expenses by Institutionalized Individuals.—Section 1902 (42 U.S.C. 1396), as amended by the amendment made by section 411(n)(3) of this Act, is amended by adding at the end the following new subsection: “(r) For purposes of sections 1902(a)(17) and 1924(d)(D(D) and for purposes of a waiver under section 1915, with respect to the post-eligibility treatment of income of individuals who are institutionalized or receiving home or community-based services under such a waiver, there shall be taken into account amounts for incurred expenses for medical or remedial care that are not subject to payment by a third party, including— “(A) medicare and other health insurance premiums, deductibles, or coinsurance, and “(B) necessary medical or remedial care recognized under State law but not covered under the State plan under this title, subject to reasonable limits the State may establish on the amount of these expenses.”. 102 STAT. 763 (e) Conforming Amendment.— Section 1902 (42 U.S.C. 1396a), as amended by the amendment made by section 411(n)(3) of this Act, is amended— (1) in subsection (a)(10)(C)(i)(UD, by striking “the same” each place it appears and inserting “no more restrictive than the”; (2) by striking “and” at the end of subsection (a)(49); (3) by striking the period at the end of subsection (a)(50) and inserting “; and”; (4) by inserting after paragraph (50) of subsection (a) the following new paragraph: “(51) (A) meet the requirements of section 1924 (relating to protection of community spouses), and (B) meet the requirement of section 1917(c) (relating to transfer of assets).”; and (5) in subsection (r), as added by subsection (d)— (A) by redesignating subparagraphs (A) and (B) as clauses (i) and (ii), respectively, (B) by inserting “(1)” after “(r)”, and (C) by adding at the end the following new paragraph: “(2) (A) The methodology to be employed in determining income and resource eligibility for individuals under subsection (a)(10)(A)(i)(III), (a)(10)(A)(i)(IV), (a)(10)(A)(ii), (a)(10)(C)(i)(IH), or under subsection (f) may be less restrictive, and shall be no more restrictive, than the methodology— “(i) in the case of groups consisting of aged, blind, or disabled individuals, under the supplemental security income program under title XVI, or “(ii) in the case of other groups, under the State plan most closely categorically related. “(B) For purposes of this subsection and subsection (a)(10), methodology is considered to be ‘no more restrictive’ if, using the methodology, additional individuals may be eligible for medical assistance and no individuals who are otherwise eligible are made ineligible for such assistance.”. (f) Treatment of Homestead Exemption in Missouri.—The State medical assistance plan of Missouri shall not be in compliance with the requirements of title XIX of the Social Security Act as of October 1, 1989, unless such plan is amended to provide that, in determining the resources of any aged, blind, or disabled individual in the State who applies for medical assistance under such plan on or after such date, the State will not consider the home of the individual as a resource, regardless of the value of the home. (g) Effective Date.— (1) (A) The amendments made by this section apply (except as provided in this subsection) to payments under title XIX of the Social Security Act for calendar quarters beginning on or after September 30, 1989, without regard to whether or not final regulations to carry out such amendments have been promulgated by such date. (B) Section 1924 of the Social Security Act (as inserted by subsection (a)) shall only apply to institutionalized individuals who begin continuous periods of institutionalization on or after September 30, 1989, except that subsections (b) and (d) of such section (and so much of subsection (e) of such section as relates to such other subsections) shall apply as of such date to individuals institutionalized on or after such date. (2) (A) The amendment made by subsection (b) and section 1902(a)(51)(B) of the Social Security Act, apply (except as pro-102 STAT. 764vided in paragraph (5)) to payments under title XIX of the Social Security Act for calendar quarters beginning on or after July 1, 1988, or the date of the enactment of this Act, without regard to whether or not final regulations to carry out such amendments have been promulgated by such date. (B) Section 1917(c) of the Social Security Act, as amended by subsection (b) of this section, shall apply to resources disposed of on or after July 1, 1988. (C) Notwithstanding subparagraphs (A) and (B), a State may continue to apply the policies contained in the State plan as of June 30, 1988, with respect to resources disposed of before July 1, 1988. (3) The amendments made by subsection (c) shall apply to transfers occurring on or after July 1, 1988, without regard to whether or not final regulations to carry out such amendments have been promulgated by such date. (4) The amendment made by subsection (d) is effective on and after April 8, 1988. The final rule of the Health Care Financing Administration published on February 8, 1988 (53 Federal Register 3586) is superseded to the extent inconsistent with the amendment made by subsection (d). (5) In the case of a State plan for medical assistance under title XIX of the Social Security Act which the Secretary of Health and Human Services determines requires State legislation (other than legislation appropriating funds) in order for the plan to meet the additional requirements imposed by the amendments made by this section (other than subsection (e)), the State plan shall not be regarded as failing to comply with the requirements of such title solely on the basis of its failure to meet these additional requirements before the first day of the first calendar quarter beginning after the close of the first regular session of the State legislature that begins after the date of the enactment of this Act. For purposes of the previous sentence, in the case of a State that has a 2-year legislative session, each year of such session shall be deemed to be a separate regular session of the State legislature. (6) The amendments made by paragraphs (1) and (5) of subsection (e) shall apply to medical assistance furnished on or after October 1, 1982.