What Does the Supreme Court’s Decision to Nullify DOMA Mean for Medicaid LTC Benefits?

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Got LTCI, a national long-term care insurance education think tank says "Publicity around the Supreme Court’s decision to nullify the Defense of Marriage Act on June 26, 2013 has centered around the ability to file joint tax returns and collect survivor social security benefits." President and long-term care insurance expert Phyllis Shelton believes access to Medicaid LTC benefits should be discussed.

Got LTCi national long-term care insurance education

Got LTCi national long term care insurance education

This subject will be a moving target over the next two years. When 30% of the population in the country has legalized something and one of those states is California, pressure will continue to mount to expand the change.

Publicity around the Supreme Court’s decision to nullify the Defense of Marriage Act on June 26, 2013 has centered around the ability to file joint tax returns and collect survivor social security benefits. Long-term care insurance expert Phyllis Shelton believes access to Medicaid LTC benefits should be discussed.

Unlike long-term care insurance which typically extends spouse discounts and other shared benefits to domestic partners, Medicaid strictly adheres to the marriage of man and woman when allowing the healthy spouse to retain a portion of assets at the time the other spouse applies for Medicaid to pay for long-term care (LTC). This law, aka the Spousal Impoverishment Act, goes back to 1988. The amounts have increased annually to a minimum of $23,184 and a maximum of $115,920 in 2013. How does this really work? It depends on the state in which Medicaid is accessed.

When a married person applies for Medicaid to pay for LTC, the state looks at all of the assets of the couple regardless of whose name the assets are in, excluding the home, one car, burial policies, and household furnishings. In some states, the healthy spouse keeps half of the assets up to a maximum of $115,920. In other states, the healthy spouse keeps the maximum. In either case, excess assets are spent down to about $2,000. This amount also varies by state, ranging from a high of $4,150 in New York and a low of $1,000 in Missouri. When a single individual applies for Medicaid and this includes a domestic partner, all assets in that person’s name must be spent down to this low amount.

Amounts that each state allows Medicaid applicants to keep vary. The details by state are in Phyllis Shelton's book Protecting Your Family with Long-Term Care Insurance. Some states have different asset minimums, for example, and income is treated differently.

Before June 26, 2013, Medicaid looked at same-sex spouses as an unmarried applicant for Medicaid benefits even in the 13 states that allow same-sex marriages: California, Connecticut, Delaware, Iowa, Maine, Maryland, Massachusetts, Minnesota, New Hampshire, New York, Rhode Island, Vermont, and Washington, and the District of Columbia. The Defense of Marriage Act (DOMA), enacted in 1996, allowed states to refuse to recognize same-sex marriages performed under the laws of other states. Therefore twenty-nine states prohibit it in their constitutions and other states either prohibit same-sex marriage by statute or have no law either way. So here’s the change: Section 3 of DOMA prevented the federal government from recognizing same-sex marriages. However, that provision was ruled unconstitutional by the U.S. Supreme Court on June 26, 2013, in United States v. Windsor. The result is that in the states that recognize same-sex marriages, federal benefits will be administered the same for same-sex and heterosexual marriages.

What happens when a same-sex couple is married in Maryland, for example, moves to Tennessee and one spouse applies for Medicaid to pay for LTC, since Tennessee is one of the states that prohibit same-sex marriages by constitution?

In the June 27, 2013 Tennessean, Vanderbilt University legal analyst and constitutional law professor Suzanna Sherry says: “Tennessee couples will see benefits from the Windsor case (DOMA) only to the extent that Tennessee recognizes their out-of-state marriages, which I believe is still an open question in Tennessee and will have to be litigated. If Tennessee recognizes their marriages, then they will receive all the federal benefits of other married couples: They can file joint tax returns, obtain survivor social security benefits, shop at the base PX if they’re married to a member of the military, etc.”

She went on to say that the reasoning of the Windsor case can be used to argue that any ban on same-sex marriage is unconstitutional.

Phyllis Shelton sums it up: “It is logical to believe at this time that when couples from a state that approves same-sex marriage move to a state that doesn’t recognize them, the new home state will continue to treat them as single individuals when they apply for Medicaid LTC benefits until the new home state lifts the ban on same-sex marriages.”

She concluded with "This subject will be a moving target over the next two years. When 30% of the population in the country has legalized something and one of those states is California, pressure will continue to mount to expand the change." ABC News' Status of the States on Same-Sex Marriage is a good resource to see where each state stands.

Phyllis Shelton is the President of LTC Consultants, a Nashville-based company that she founded in 1991 specializing in long-term care insurance sales training, consumer education and marketing materials. For more information, see her consumer website at http://www.GotLTCi.com.

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