Under current law, the Department of Health and Family Services (DHFS)
administers the Medical Assistance (MA) program, which provides federal and state
moneys to pay for health care and long-term care services, including care in a
nursing home, provided to MA recipients, who are, generally, low-income, elderly,
or disabled persons who meet other specific eligibility requirements. To be eligible

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for MA for long-term care services, an individual must meet certain very low income
and resource requirements, and may have to pay for his or her own long-term care
until the eligibility requirements are met.

Current law provides rules, based on federal law, concerning divestment, which
refers to the transferring of one's assets for less than fair market value for the
purpose of reducing one's income and resources to become eligible for MA for
long-term care services. If a person divests assets on or after the person's look-back
date (generally, the date that is three years before the person applies for MA for
long-term care services), the person may be ineligible for MA for a specific time
period (penalty period). The federal Deficit Reduction Act, which became effective
on February 8, 2006, made a number of changes in the asset and divestment rules.
This bill makes a number of changes with respect to assets and divestment to
conform Wisconsin law to the federal law. The bill:

1. Changes the look-back date to five years for transfers that occur on or after
February 8, 2006.

2. Changes the beginning date for the penalty period from the date on which
assets were transferred to the later of the date on which assets were transferred or
the date on which the person applies and is eligible for MA for long-term care
services.

3. Provides that the purchase of a loan, promissory note, mortgage, or life estate
after February 8, 2006, is a divestment and specifies the requirements for when such
a purchase is not to be considered a divestment.

4. Provides that as a condition of receiving MA for long-term care services an
applicant (when applying) or recipient (when being recertified) must disclose any
interest he or she or his or her spouse has in an annuity that was purchased on or
after February 8, 2006, or with respect to which a transaction occurred on or after
February 8, 2006. A transaction is defined as any action that changes the course of
payments to be made or the treatment of income or principal.

5. Specifies the conditions under which the purchase of an annuity on or after
February 8, 2006, is not to be considered a divestment, including designating DHFS
as a remainder beneficiary under the annuity.

6. Requires DHFS to establish a hardship waiver process, with certain criteria,
under which the divestment rules would not apply to a person because it would result
in undue hardship for the person and allows DHFS to pay the full nursing facility
payment rate for up to 30 days to hold a bed in the facility for a person involved in
a pending undue hardship determination.

7. Provides, generally, that a person is ineligible for MA for long-term care
services if the equity in their home exceeds $750,000 unless their spouse or minor
or disabled child is living in the home. Under current law, a person's home,
regardless of the value, is not counted when the person's income and resources for
MA eligibility are determined.

8. Specifies the conditions under which entrance fees paid by a person on
admission to a continuing care retirement community or a life care community will
be considered resources available to the person for paying for his or her long-term
care and for determining the person's eligibility for MA for long-term care services.