SOCIAL SERVICES; MEDICAID; LEGISLATION;

WELFARE - MEDICAL ASSISTANCE (MEDICAID);

Federal laws/regulations; Connecticut laws/regulations;

You asked us to explain the law governing burials for Medicaid recipients.

SUMMARY

In determining Medicaid eligibility under federal and state law, the Department of Social Services (DSS) must exclude from assets both burial plots and certain prepaid funeral contracts held by applicants and recipients. For all but one group of beneficiaries, one burial plot is excluded. Certain Medicaid applicants and recipients residing in nursing homes or participating in the Connecticut Home Care Program for Elders can exclude the plots of the applicant’s or recipient’s spouse (sometimes called MCCA spouses) and immediate family. DSS excludes a maximum of $ 1,500 for funeral or burial funds for each MCCA spouse. For all others it excludes $ 1,200. The rules for both the plots and funds are different because federal law allows states to apply more restrictive rules for certain groups of Medicaid applicants and recipients, but not others.

A bill working its way through the 2003 General Assembly requires the DSS commissioner to apply the funeral and burial exclusions uniformly throughout the state. The bill is apparently meant to address a question about what constitutes a burial plot, although it does not explicitly apply to Medicaid. In the interim, DSS has proposed regulations that would define burials so that certain items, such as caskets, would not be considered part of the burial plot. It would be applied to all public assistance programs, including cash and medical assistance, and Food Stamps.

In addition to the exclusions, state law allows for state funeral and burial payments for certain public assistance beneficiaries. Unlike cash assistance programs, Medicaid does not pay for a deceased beneficiary’s funeral or burial expenses. But before the state can recover Medicaid benefits paid, up to $ 1,200 can be taken from the deceased person’s estate to pay these expenses. If there is no estate, the state pays up to this amount using other appropriated funds.

BURIALS — ASSET EXCLUSION FOR MEDICAID ELIGIBILITY PURPOSES

What Federal Law Requires

In many areas, state Medicaid rules must follow the rules established for the Supplemental Security Income (SSI) program. For example, states must use the asset test for eligibility that is established for SSI. SSI regulations require that burial funds up to $ 1,500 be excluded from assets. These are defined as revocable burial contracts, burial trusts, and other burial arrangements. The exclusion is reduced by the face value of any life insurance policy the individual or his spouse owns if the cash surrender value of those policies has already been excluded. Irrevocable burial funds must also be excluded (20 CFR § 416. 1231).

The SSI regulations also require exclusion of one burial space, defined as “burial plots, gravesites, crypts, mausoleums, urns, niches, and other customary and traditional repositories. ” It also includes necessary and reasonable improvements or additions to the spaces, including “vaults, headstones, markers, plaques, or burial containers and arrangements for opening and closing the gravesite” for the deceased’s burial. SSI excludes both the applicant’s or recipient’s space, as well as one space for his spouse or immediate family member. These family members are defined as the individual’s minor and adult children, including adopted children and step-children; brothers and sisters; parents; adoptive parents; and the spouses of those individuals.

But states designated as “ Section 209(b)” states can use different standards for aged, blind, and disabled Medicaid applicants and recipients. This is because when Congress enacted SSI in 1972, states were given the option to continue to use the Medicaid eligibility standards they had in place at that time, thus earning them the 209b designation. Those policies are generally more restrictive than the SSI eligibility rules. Eleven states, including Connecticut, still operate under this option. So although federal SSI law requires a $ 1,500 exclusion, as a 209b state, Connecticut has chosen to apply the $ 1,500 limit only to elderly people receiving institutional or community-based services (MCCA spouse). (In fact, federal regulations prohibit states from using more restrictive criteria with this population, see 42 CFR 435. 121. ) Other Medicaid recipients who are aged, blind, disabled may exclude only $ 1,200. (Certain families who are eligible for Medicaid are also subject to the $ 1,200 limit. ) (Connecticut’s Medicaid liquid asset test is also different than the SSI limit. For a single person, the limit is $ 1,600; under SSI rules, the limit is $ 2,000. )

Connecticut’s Funeral and Burial Rules

State Medicaid burial regulations largely mirror the SSI regulations, with the exception of the $ 1,200 burial fund and one plot limits for all Medicaid applicants and recipients except MCCA spouses

In addition to the $ 1,500/$ 1,200 limit for revocable burial funds, the regulations allow the exclusion of one irrevocable burial fund. State law limits the amount that can be held in any irrevocable funds to $ 5,400, so that is the most that can be excluded for Medicaid eligibility purposes in Connecticut.

State regulations define a burial plot much like the SSI regulations. But because the state has the ability to use more restrictive eligibility criteria, only MCCA spouses can exclude multiple burial plots. These include plots for the assistance unit’s natural, adopted, or step child; natural or adoptive parent; and sibling. For all other Medicaid “assistance units” (i. e. , those people who are actually applying for or receiving assistance), only one burial plot may be excluded (DSS Uniform Policy Manual, § 4020. 05).

2003 Bill and DSS Proposed Regulations

HB 6468 (File 198) requires the DSS commissioner to apply the burial asset exclusions uniformly throughout the state for purposes of eligibility for both the State Supplement and Temporary Family Assistance programs. The House referred the bill to the Human Services Committee on April 14. Human Services favorably reported it back to the House on April 23.

And DSS has proposed regulations that would narrow the definition of a burial plot to include “a grave site, crypt, mausoleum or niche, and a headstone or marker, but not personal property, funeral services, or funeral merchandise, such as a casket” (DSS Uniform Policy Manual, § 4000. 01, p. 2 (proposed)).

USE OF ESTATE TO PAY LAST EXPENSES

By law, when a Medicaid beneficiary dies, the state may not make a claim for benefits paid until certain expenses have been taken off the top. If someone has money in an estate, the amount that can be taken for a burial or funeral expenses is $ 1,200. But this amount is reduced by the amount in any revocable or irrevocable funeral contract or the face value of any life insurance policy the recipient owned. According to DSS’s Robert Augeri, for beneficiaries with no estates, DSS will pay the $ 1,200, less the deduction for the above contracts or policies, from the State Administered General Assistance budget account (CGS § 17b-95, with cross reference to § 17b-84).

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