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Partnership for Long Term Care

OBRA 1993 Provisions Pertaining to
The Partnership For Long-Term Care

The Omnibus Reconciliation Act of 1993 contained language with direct impact on the expansion of partnerships for long-term care. The Act recognized the four initial states now operating partnership programs plus a future program in Iowa and a modified program in Massachusetts. These six states were allowed to operate their partnerships as planned because their state plan amendments were approved by HHS before May 14, 1993.

States seeking a state plan amendment after May 14th must abide by the conditions outlined in OBRA'93. There are three sections with specific language pertaining to partnership programs. The following outlines the requirements in each section.

• Sec 1917(b) paragraph 1 subparagraph C
  This section requires any state operating a partnership program to recover from the estates of all persons receiving services under Medicaid. The result of this language is that the asset protection component of the partnership is in effect only while the insured is alive. After the participant dies, states must recover what Medicaid spent from the estate, including protected assets.
• Sec 1917(b) paragraph 3
  This section prevents a state from waiving the estate recovery requirement for partnership participants.
• Sec 1917(b) paragraph 4 subparagraph B
  This section requires a specific definition of "estate" for partnership participants. Estates:
1. shall include all real and personal property and other assets included within the individual's estate, as defined for purposes of State probate law; and
2. . . . any other real and personal property and other assets in which the individual had any legal title or interest at the time of death (to the extent of such interest), including such assets conveyed to a survivor, heir, or assign of the deceased individual through joint tenancy, tenancy in common, survivorship, life estate, living trust or other assignment.

The above definition may vary from the current definition used by a state for estate recovery. States implementing a partnership may find themselves in the position of having to use a more encompassing definition for partnership participants alone. These post OBRA partnership states may even have to seek legislative approval to implement the required recovery process for partnership participants.