H 4185 General Bill, By T.L. Farr, Carnell, Delleney, P.B. Harris, Koon, 
Littlejohn, J.G. Mattos, McCraw, Neilson, Phillips, Quinn, Riser, C.H. Stone and 
Wilder
 A Bill to amend the Code of Laws of South Carolina, 1976, by adding Article 6
 to Chapter 6, Title 44 and Section 62-5-450 so as to provide for
 court-approved trusts and their requirements in order for a trust beneficiary
 to qualify for Medicaid for nursing home care; and to amend Section 62-5-420,
 relating to conservators, so as to provide that the establishment of a
 court-approved trust meeting certain criteria is not a transfer or alienation
 of property.

   05/12/93  House  Introduced, read first time, placed on calendar
                     without reference HJ-46
   05/26/93  House  Amended HJ-55
   05/26/93  House  Read second time HJ-58
   05/27/93  House  Read third time and sent to Senate HJ-112
   06/01/93  Senate Introduced and read first time SJ-55
   06/01/93  Senate Referred to Committee on Medical Affairs SJ-55

AMENDED

May 26, 1993

H. 4185

Introduced by REPS. Farr, P. Harris, Carnell, Quinn, Neilson, Stone, Mattos, Koon, Littlejohn, McCraw, Phillips, Delleney, Riser and D. Wilder

S. Printed 5/26/93--H.

Read the first time May 12, 1993.

A BILL

TO AMEND THE 1976 CODE BY ADDING ARTICLE 6 TO CHAPTER 6, TITLE 44 SO AS TO PROVIDE FOR TRUSTS and THEIR REQUIREMENTS IN ORDER FOR A TRUST BENEFICIARY TO QUALIFY FOR MEDICAID FOR NURSING HOME CARE; and TO AMEND SECTION 62-5-420, RELATING TO CONSERVATORS, SO AS TO PROVIDE THAT THE ESTABLISHMENT OF A TRUST MEETING CERTAIN CRITERIA IS NOT A TRANSFER OR ALIENATION OF PROPERTY.

Whereas, the State makes significant expenditures for nursing home care under the South Carolina Medicaid program; and

Whereas, a large number of persons do not have enough income to afford nursing home care but have too much income to qualify for Medicaid; and

Whereas, if the State exercises its authority under federal law to waive requirements concerning Medicaid qualifying trusts in cases of undue hardship, these persons may become qualified for Medicaid; and

Whereas, it is therefore appropriate to enact state laws which authorize and limit these trusts in a manner that is consistent with Title XIX of the Federal "Social Security Act", 42 U.S.C. Section 1396 et seq. and which provide that persons who, through an undue hardship waiver, qualify for assistance as a result of the creation of these trusts must be treated the same as any other recipient of Medicaid for nursing home care; and

Whereas, in addressing this matter, the General Assembly intends only to authorize and limit the treatment of certain trusts and transfers of resources for the purposes of Medicaid eligibility. It is not the General Assembly's intent to approve or disapprove of privately created trusts or private transfers of property made under the same or similar circumstances. Now, therefore,

Be it enacting by the General Assembly of the State of South Carolina:

SECTION 1. The 1976 Code is amended by adding:

"Article 6

Section 44-6-710. If an applicant for Medicaid for nursing home care would be ineligible because a trust established for the applicant was deemed a Medicaid qualifying trust or resources in the trust were deemed an improper transfer of resources, the person's application must be treated as a case of undue hardship under federal law if all of the criteria in Section 44-6-720 are met. For the purposes of this section, `Medicaid qualifying trust' has the same meaning as set forth in 42 U.S.C. Section 1396a(k).

Section 44-6-720. (A) To be considered for a waiver due to undue hardship, the applicant must meet all other applicable eligibility criteria for assistance. If the federal "transfer of resources" rule set forth in 42 U.S.C. Section 1396p(c), as amended, applies to the applicant, then no undue hardship waiver may be granted until the period of ineligibility has expired. For the purposes of this subsection, the maximum length of ineligibility is extended to sixty months from the date of any improper transfer.

(B) The trust established for the applicant must meet the following criteria:

(1) the applicant's monthly gross income from all sources, without reference to the trust, exceeds the income eligibility standard for Medicaid then in effect but is less than the average private pay rate for nursing home care for the State;

(2) the property used to fund the trust is limited to monthly unearned income owned by the applicant, including any pension payment;

(3) the applicant and the state Medicaid program are the sole beneficiaries of the trust;

(4) the entire income and corpus of the trust, or as much as may be distributed each month without violating federal requirements for federal financial participation, must be distributed each month for expenses related to the applicant's nursing home care that are approved under the Medicaid program, except that:

(a) an amount reasonably necessary to maintain the existence of the trust, as approved by the Medicaid program, may be retained in the trust; and

(b) deductions may be distributed from the trust to the same extent deductions from the income of a nursing home resident who is not a trust beneficiary are allowed under the Medicaid program, which shall include:

(i) monthly personal needs allowance;

(ii) payments to the beneficiary's community spouse or dependent family members as provided and in accordance with state and federal law;

(iii) specified health insurance costs and special medical services provided under Title XIX of the federal `Social Security Act', 42 U.S.C. Section 1396a(r), as amended; and

(iv) other deductions provided in regulations of the State Health and Human Services Finance Commission;

(5) upon the death of the beneficiary, a remainder interest in the corpus of the trust passes to the State Health and Human Services Finance Commission. The commission shall remit the state share of the trust to the general fund; and

(6) the trust is not subject to modification by the beneficiary or the trustee without the approval of the state Medicaid program.

Section 44-6-730. The State Health and Human Services Finance Commission shall promulgate regulations as are necessary for the implementation of this article and as are necessary to comply with federal law. In addition, the commission shall amend the state Medicaid plan in a manner that is consistent with this article."

SECTION 2. Section 62-5-420 of the 1976 Code is amended to read:

"Section 62-5-420. The appointment of a conservator vests in him title as trustee to all property of the protected person, presently held or thereafter acquired, including title to any property theretofore held for the protected person by custodians or attorneys in fact. The Neither the appointment of a conservator nor the establishment of a trust in accordance with Title 44, Chapter 6, Article 6, is not a transfer or alienation within the meaning of general provisions of any federal or state statute or regulation, insurance policy, pension plan, contract, will, or trust instrument, imposing restrictions upon or penalties for transfer or alienation by the protected person of his rights or interest, but this section does not restrict the ability of persons to make specific provision by contract or dispositive instrument relating to a conservator."

SECTION 3. This act does not apply if federal funds are not available for persons who would qualify for Medicaid as a result of a trust that meets the criteria set forth in Section 44-6-720.

SECTION 4. This act takes effect July 1, 1993, and applies to a trust established for or transfer of resources made by or for a person applying for or receiving Medicaid for nursing home care pursuant to state and federal law after June 30, 1993; except that a trust created before July 1, 1993, which does not comply with this act may be modified to comply with this act no later than January 1, 1994.