HB 1221-FN – AS AMENDED BY THE HOUSE
15Feb2006… 0631h
2006 SESSION
05/01
HOUSE BILL 1221-FN
AN ACT relative to recovery of medical assistance.
This bill restricts the department of health and human service’s ability to recover the cost of medical assistance from life estates created before July 1, 2005 or created 5 years prior to the decedent’s eligibility for such assistance. The bill also prohibits the department from compelling the sale of the primary residence of a surviving joint owner as part of the department’s estate recovery practice.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
15Feb2006… 0631h
06-2938
05/01
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Six
AN ACT relative to recovery of medical assistance.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Recovery of Assistance from Successor Owners of Non-Probate Assets of Recipient. RSA 167:14-a, V and VI are repealed and reenacted to read as follows:
V.(a) Solely for purposes of calculating the amount of medical assistance recoverable from successor legal or beneficial owners of property interests of the recipient passing to them at the death of the recipient outside of probate, the estate of a recipient shall be deemed to include the value immediately prior to the recipient’s death of the decedent’s equitable interest in all property, real or personal:
(1) Held by the recipient in joint tenancy with rights of survivorship;
(2) Held by the recipient in life tenancy; or
(3) held in a revocable trust of which the recipient was directly or indirectly a grantor to the extent of the recipient’s proportionate share of contribution.
(b) No sooner than 45 days from the death of the recipient, the department shall provide the surviving joint owner, remainderman of the life estate, or trustee of the revocable trust, as the case may be, notice of the department’s claim. Within 30 days of the receipt of notification of the department’s claim, the surviving joint owner, remainderman, or trustee shall acknowledge receipt of the department’s claim and, provided that there shall not be undue hardship imposed upon the surviving joint owner, remainderman, or beneficiary of the trust, either tender an amount equal to the deceased recipient’s interest in the identified property or financial instrument to the state of New Hampshire toward the deceased’s medical assistance bill, but such amount shall not exceed the total amount of medical assistance provided to the deceased recipient, or enter into a binding agreement to make such payment as soon as is practicable. If the joint owner, remainderman, or trustee refuses to acknowledge receipt of the department’s claim or to tender payment or fail to fulfill the agreement to pay without good cause, as required by this paragraph, the commissioner may bring an action in superior court to compel such payment. Nothing in this paragraph shall be interpreted or applied so as to violate RSA 167:16-a, IV or 42 U.S.C. section 1396p(b)(2)(A) prohibiting recovery when the recipient is survived by a spouse, minor children, or disabled children. The department shall not compel the sale of any real estate that constitutes the primary residence of any surviving joint owner, remainderman, or trust beneficiary, or require payments that would leave any surviving joint owner, remainderman, or trust beneficiary without sufficient income or resources to maintain his or her housing.
VI.(a) Paragraph V shall not affect any real or personal property held by the recipient in sole ownership or in tenancy in common, but such property or the recipient’s share thereof shall be included in the recipient’s probate estate and shall be subject to claims filed by the department as a creditor in the normal course pursuant to RSA 167:14, II.
(b) Paragraph V shall apply to all specified property interests of the recipient passing to others at the death of the recipient outside of probate, where the death of the recipient occurs on or after the effective date of this act, but without regard to the date that such interests were first created; provided that it shall not apply to life estates created or reserved by the recipient:
(1) Before July 1, 2005; or
(2) Before the beginning of the period specified in RSA 167:4, I(b) during which transfers by the recipient for less than fair market value may be taken into account for purposes of determining eligibility for assistance, as such period may be limited by federal law.
(c) “Equitable interest” as used in paragraph V shall mean the legal interest of the recipient as adjusted to take into account any disproportionate contributions by any other joint tenant or by any co-grantor of a trust, and in the case of a life tenancy shall be valued in accordance with the applicable federal Social Security regulation. In the absence of evidence to the contrary, the “equitable interest” of the recipient in any real estate, or in a trust’s real estate holdings, shall be presumed to be the result of reducing the equalized property tax value, as computed from the latest assessment, by any amounts owing on mortgages or for back taxes or under other liens, and dividing by the total number of co-owners of the property, including the recipient.
(d) Recovery from any remainderman shall be limited to any amount by which the value of the interest received by the remainderman, valued as of the date the interest was acquired and in accordance with the applicable Social Security regulation, exceeds any consideration given by the remainderman from the date the interest was acquired to the date of death of the recipient.
(e) Recovery from any surviving joint tenant shall be limited to any amount by which the value of the interest received by the joint tenant, valued as of the date the interest was acquired, exceeds any consideration given by the surviving joint tenant from the date the interest was acquired to the date of death of the recipient.
2 Effective Date. This act shall take effect upon its passage.
LBAO
06-2938
Amended 3/1/06
HB 1221 FISCAL NOTE
AN ACT relative to recovery of medical assistance.
FISCAL IMPACT:
The Department of Health and Human Services states this bill, as amended by the House, (Amendment #2006-0631h), will decrease state and county revenue, and increase state expenditures by an indeterminable amount in FY 2007 and each year thereafter. There will be no fiscal impact on county and local expenditures or local revenue.
METHODOLOGY:
The Department indicated that Chapter 175, Laws of the 2005 (HB 691), authorized expansions to the federally mandated estate recovery practice. This bill alters the expansions to estate recovery by imposing a ‘grandfather’ clause on interests created prior to June 30, 2005, as well as interests created outside of the applicable Medicaid long-term care look-back pursuant to RSA 167:4,I(b). Additional limitation would prohibit recovery if the Medicaid recipient received value for the interest originally conveyed. This bill also defines equitable interest in such a way that does not consider fair market value, which is the basis the Department traditionally employs when determining the value of the interest held by an individual for purposes of either eligibility or recovery. Further, this definition places the Department’s right to recovery secondary to many other debts that might be secured by the property regardless of whether the Department has secured its debt with a properly recorded lien pursuant to RSA 167:14 in a superior position to those other creditors listed. This bill also limits the Department’s existing authority to recover from revocable trusts pursuant to RSA 164:14,V, which was effective against trusts created after January 1, 1999, to allow recovery only from trusts created after June 30, 2005. The changes will reduce revenue for the Department by an indeterminable amount. HB 691 estimated an increase in revenue of approximately $500,000 annually, which was included in the Department’s FY 2006-2007 operating budget revenue estimates. This bill would postpone recoveries from property held in joint tenancies, life estates, and revocable trusts for between five and ten years. Currently, Medicaid recovery revenue is distributed 50% to the federal government, 25% to the state and 25% to the counties. The Department stated it would incur additional administrative cost to implement these changes. The Department is unable to determine the exact fiscal impact at this time.