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South Carolina Passes New Estate Recovery Law That Exempts Certain Assets From Medicaid Recovery

On June 10th, 1997, The Governor of South Carolina signed the “Medicaid, medical assistance, recovery from estates of certain individuals” Act into law

ESTATE RECOVERY IN SOUTH CAROLINA – CHAPTER TWO

 

On July 1, 1994, South Carolina began a mandatory estate recovery program to recover from the probate estates of those who received certain Medicaid assistance during their lifetimes. On June 10th, 1997, The Governor of South Carolina signed into law an act which amended Section 43-7-460 of the South Carolina Code of Laws relating to recovery from estates of certain individuals for Medicaid assistance and to establish conditions for undue hardship under which recovery must be waived.

Under this new Act, The State Department of Health and Human Services is required to seek recovery of certain Medicaid payments from the estates of persons who…..

1. At the time of death was an inpatient in a nursing facility, intermediate care facility for the mentally retarded, or other medical institution so long as the person was required, as a condition of receiving services in the facility under the state Medicaid plan, to contribute all of that person’s income – excluding a minimal amount for personal needs – toward the cost of his or her medical care; or

 

2. Was fifty-five years of age or older when the person received Medicaid consisting of nursing facility services, home and community-based services, and hospital and prescription drug services provided to individuals in nursing facilities or receiving home and community-based services.

 

Under the law, recovery may be made (1) only after the death of the deceased person’s surviving spouse, if any, and (2) only at a time when the deceased person has no surviving child under age twenty-one or no child who is blind or permanently and totally disabled as defined by Title XVI of the Social Security Act.

 

In addition, the state must waive recovery where there is proof of undue hardship, asserted by an heir of the deceased person or a person who received the property under the will of the deceased person that is claimed pursuant to 42 U.S.C. 1396p(b)(3). And until conflicting hardship standards and criteria are issued by the Secretary of the United States Department of Health and Human Services, the following are considered as instances of undue hardship in which recovery must be waived:

 

(1) As to the deceased person’s home property, if the deceased person could have transferred the home property on or after the date of his or her Medicaid application without incurring a penalty under 42 U.S.C. Section 1396p(c), meaning that the property could have been transferred without penalty to a:

 

(a) spouse who has survived the deceased person;

 

(b) a surviving child of the deceased person who was under age twenty-one or blind or totally disabled;

 

(c) a surviving sibling of the deceased person who possessed an equity interest in the property and who lived in the home for a period of at least one year immediately prior to the date the deceased person was institutionalized; or

 

(d) a surviving child of the deceased person who lived in the home for a period of at least two years immediately before the deceased person became institutionalized and who provided care which allowed the deceased person to delay institutionalization.

 

 

Hardship here only applies if the individual to whom the property could have been transferred without penalty is actually residing in the home at the time the hardship is claimed and hardship status only protects up to one hundred thousand dollars of appraised value of the home property and, to the extent the appraised value of the home property exceeds one hundred thousand dollars, the excess is subject to recovery .

(2) As to the deceased person’s home and one acre of land surrounding the house, if an immediate family member:

 

(a) has resided in the home for at least two years immediately prior to the recipient's death;

 

(b) is actually residing in the home at the time the hardship is claimed;

 

(c) owns no other real property or agrees to sell all other interest in real property and give the proceeds to the department; and

 

(d) has annual gross family income that does not exceed one hundred eighty-five percent of the federal poverty guidelines.

 

(3) As to an income producing asset:

 

(a) the spouse's or immediate family member's annual gross family income would fall below the federal poverty guidelines without the income produced by the asset; and

 

(b) at the time of death, the asset is not producing annual income in excess of one hundred eighty-five percent of the federal poverty guidelines or the spouse or immediate family member agrees to pay all income in excess of one hundred eighty-five percent of the federal poverty guidelines to the department until the department recovers all medical assistance due under this section.

 

Recovery of medical assistance payments under this section applies to medical assistance paid after June 30, 1994. Claims against an estate under this section have priority as established in Section 62-3-805(a)(2)(ii).

 

For purposes of this section:

 

(1) `estate' means all real and personal property and other assets included within the individual's estate as defined in Section 62-1-201(11);

 

(2) the `state plan' means Title XIX State Plan for Medical Assistance in effect at the decedent's death;

 

(3) `immediate family member' means a child, parent, brother, or sister of the deceased.

 

Regardless of any provision which grants the State the option to exempt home and community-based services or other noninstitutional Medicaid services from the estate recovery provisions mandated by Section 13612 of the federal Omnibus Budget Reconciliation Act of 1993, in South Carolina, the State Health and Human Services Finance Commission shall seek recovery of medical assistance paid under the Title XIX State Plan for Medical Assistance from the estate of an individual who:

 

(1) At the time of death was an inpatient in a nursing facility, intermediate care facility for the mentally retarded, or other medical institution if the individual is required, as a condition of receiving services in the facility under the state plan, to spend for costs of medical care all but a minimal amount of the person's income required for personal needs; or

 

(2) was fifty-five years of age or older when the individual received medical assistance but only for medical assistance consisting of nursing facility services.

 

 



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