42 U.S.C. § 1396p : US Code - Section 1396P: Liens, adjustments and recoveries, and transfers of assets

Search 42 U.S.C. § 1396p : US Code - Section 1396P: Liens, adjustments and recoveries, and transfers of assets

    (a) Imposition of lien against property of an individual on account
      of medical assistance rendered to him under a State plan
      (1) No lien may be imposed against the property of any individual
    prior to his death on account of medical assistance paid or to be
    paid on his behalf under the State plan, except - 
        (A) pursuant to the judgment of a court on account of benefits
      incorrectly paid on behalf of such individual, or
        (B) in the case of the real property of an individual - 
          (i) who is an inpatient in a nursing facility, intermediate
        care facility for the mentally retarded, or other medical
        institution, if such individual is required, as a condition of
        receiving services in such institution under the State plan, to
        spend for costs of medical care all but a minimal amount of his
        income required for personal needs, and
          (ii) with respect to whom the State determines, after notice
        and opportunity for a hearing (in accordance with procedures
        established by the State), that he cannot reasonably be
        expected to be discharged from the medical institution and to
        return home,

      except as provided in paragraph (2).

      (2) No lien may be imposed under paragraph (1)(B) on such
    individual's home if - 
        (A) the spouse of such individual,
        (B) such individual's child who is under age 21, or (with
      respect to States eligible to participate in the State program
      established under subchapter XVI of this chapter) is blind or
      permanently and totally disabled, or (with respect to States
      which are not eligible to participate in such program) is blind
      or disabled as defined in section 1382c of this title, or
        (C) a sibling of such individual (who has an equity interest in
      such home and who was residing in such individual's home for a
      period of at least one year immediately before the date of the
      individual's admission to the medical institution),

    is lawfully residing in such home.
      (3) Any lien imposed with respect to an individual pursuant to
    paragraph (1)(B) shall dissolve upon that individual's discharge
    from the medical institution and return home.
    (b) Adjustment or recovery of medical assistance correctly paid
      under a State plan
      (1) No adjustment or recovery of any medical assistance correctly
    paid on behalf of an individual under the State plan may be made,
    except that the State shall seek adjustment or recovery of any
    medical assistance correctly paid on behalf of an individual under
    the State plan in the case of the following individuals:
        (A) In the case of an individual described in subsection
      (a)(1)(B) of this section, the State shall seek adjustment or
      recovery from the individual's estate or upon sale of the
      property subject to a lien imposed on account of medical
      assistance paid on behalf of the individual.
        (B) In the case of an individual who was 55 years of age or
      older when the individual received such medical assistance, the
      State shall seek adjustment or recovery from the individual's
      estate, but only for medical assistance consisting of - 
          (i) nursing facility services, home and community-based
        services, and related hospital and prescription drug services,
        or
          (ii) at the option of the State, any items or services under
        the State plan (but not including medical assistance for
        medicare cost-sharing or for benefits described in section
        1396a(a)(10)(E) of this title).

        (C)(i) In the case of an individual who has received (or is
      entitled to receive) benefits under a long-term care insurance
      policy in connection with which assets or resources are
      disregarded in the manner described in clause (ii), except as
      provided in such clause, the State shall seek adjustment or
      recovery from the individual's estate on account of medical
      assistance paid on behalf of the individual for nursing facility
      and other long-term care services.
        (ii) Clause (i) shall not apply in the case of an individual
      who received medical assistance under a State plan of a State
      which had a State plan amendment approved as of May 14, 1993, and
      which satisfies clause (iv), or which has a State plan amendment
      that provides for a qualified State long-term care insurance
      partnership (as defined in clause (iii)) which provided for the
      disregard of any assets or resources - 
          (I) to the extent that payments are made under a long-term
        care insurance policy; or
          (II) because an individual has received (or is entitled to
        receive) benefits under a long-term care insurance policy.

        (iii) For purposes of this paragraph, the term "qualified State
      long-term care insurance partnership" means an approved State
      plan amendment under this subchapter that provides for the
      disregard of any assets or resources in an amount equal to the
      insurance benefit payments that are made to or on behalf of an
      individual who is a beneficiary under a long-term care insurance
      policy if the following requirements are met:
          (I) The policy covers an insured who was a resident of such
        State when coverage first became effective under the policy.
          (II) The policy is a qualified long-term care insurance
        policy (as defined in section 7702B(b) of the Internal Revenue
        Code of 1986) issued not earlier than the effective date of the
        State plan amendment.
          (III) The policy meets the model regulations and the
        requirements of the model Act specified in paragraph (5).
          (IV) If the policy is sold to an individual who - 
            (aa) has not attained age 61 as of the date of purchase,
          the policy provides compound annual inflation protection;
            (bb) has attained age 61 but has not attained age 76 as of
          such date, the policy provides some level of inflation
          protection; and
            (cc) has attained age 76 as of such date, the policy may
          (but is not required to) provide some level of inflation
          protection.

          (V) The State Medicaid agency under section 1396a(a)(5) of
        this title provides information and technical assistance to the
        State insurance department on the insurance department's role
        of assuring that any individual who sells a long-term care
        insurance policy under the partnership receives training and
        demonstrates evidence of an understanding of such policies and
        how they relate to other public and private coverage of long-
        term care.
          (VI) The issuer of the policy provides regular reports to the
        Secretary, in accordance with regulations of the Secretary,
        that include notification regarding when benefits provided
        under the policy have been paid and the amount of such benefits
        paid, notification regarding when the policy otherwise
        terminates, and such other information as the Secretary
        determines may be appropriate to the administration of such
        partnerships.
          (VII) The State does not impose any requirement affecting the
        terms or benefits of such a policy unless the State imposes
        such requirement on long-term care insurance policies without
        regard to whether the policy is covered under the partnership
        or is offered in connection with such a partnership.

      In the case of a long-term care insurance policy which is
      exchanged for another such policy, subclause (I) shall be applied
      based on the coverage of the first such policy that was
      exchanged. For purposes of this clause and paragraph (5), the
      term "long-term care insurance policy" includes a certificate
      issued under a group insurance contract.
        (iv) With respect to a State which had a State plan amendment
      approved as of May 14, 1993, such a State satisfies this clause
      for purposes of clause (ii) if the Secretary determines that the
      State plan amendment provides for consumer protection standards
      which are no less stringent than the consumer protection
      standards which applied under such State plan amendment as of
      December 31, 2005.
        (v) The regulations of the Secretary required under clause
      (iii)(VI) shall be promulgated after consultation with the
      National Association of Insurance Commissioners, issuers of long-
      term care insurance policies, States with experience with long-
      term care insurance partnership plans, other States, and
      representatives of consumers of long-term care insurance
      policies, and shall specify the type and format of the data and
      information to be reported and the frequency with which such
      reports are to be made. The Secretary, as appropriate, shall
      provide copies of the reports provided in accordance with that
      clause to the State involved.
        (vi) The Secretary, in consultation with other appropriate
      Federal agencies, issuers of long-term care insurance, the
      National Association of Insurance Commissioners, State insurance
      commissioners, States with experience with long-term care
      insurance partnership plans, other States, and representatives of
      consumers of long-term care insurance policies, shall develop
      recommendations for Congress to authorize and fund a uniform
      minimum data set to be reported electronically by all issuers of
      long-term care insurance policies under qualified State long-term
      care insurance partnerships to a secure, centralized electronic
      query and report-generating mechanism that the State, the
      Secretary, and other Federal agencies can access.

      (2) Any adjustment or recovery under paragraph (1) may be made
    only after the death of the individual's surviving spouse, if any,
    and only at a time - 
        (A) when he has no surviving child who is under age 21, or
      (with respect to States eligible to participate in the State
      program established under subchapter XVI of this chapter) is
      blind or permanently and totally disabled, or (with respect to
      States which are not eligible to participate in such program) is
      blind or disabled as defined in section 1382c of this title; and
        (B) in the case of a lien on an individual's home under
      subsection (a)(1)(B) of this section, when - 
          (i) no sibling of the individual (who was residing in the
        individual's home for a period of at least one year immediately
        before the date of the individual's admission to the medical
        institution), and
          (ii) no son or daughter of the individual (who was residing
        in the individual's home for a period of at least two years
        immediately before the date of the individual's admission to
        the medical institution, and who establishes to the
        satisfaction of the State that he or she provided care to such
        individual which permitted such individual to reside at home
        rather than in an institution),

      is lawfully residing in such home who has lawfully resided in
      such home on a continuous basis since the date of the
      individual's admission to the medical institution.

      (3)(A) The State agency shall establish procedures (in accordance
    with standards specified by the Secretary) under which the agency
    shall waive the application of this subsection (other than
    paragraph (1)(C)) if such application would work an undue hardship
    as determined on the basis of criteria established by the
    Secretary.
      (B) The standards specified by the Secretary under subparagraph
    (A) shall require that the procedures established by the State
    agency under subparagraph (A) exempt income, resources, and
    property that are exempt from the application of this subsection as
    of April 1, 2003, under manual instructions issued to carry out
    this subsection (as in effect on such date) because of the Federal
    responsibility for Indian Tribes and Alaska Native Villages.
    Nothing in this subparagraph shall be construed as preventing the
    Secretary from providing additional estate recovery exemptions
    under this subchapter for Indians.
      (4) For purposes of this subsection, the term "estate", with
    respect to a deceased individual - 
        (A) 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
        (B) may include, at the option of the State (and shall include,
      in the case of an individual to whom paragraph (1)(C)(i)
      applies), 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 arrangement.

      (5)(A) For purposes of clause (iii)(III), the model regulations
    and the requirements of the model Act specified in this paragraph
    are:
        (i) In the case of the model regulation, the following
      requirements:
          (I) Section 6A (relating to guaranteed renewal or
        noncancellability), other than paragraph (5) thereof, and the
        requirements of section 6B of the model Act relating to such
        section 6A.
          (II) Section 6B (relating to prohibitions on limitations and
        exclusions) other than paragraph (7) thereof.
          (III) Section 6C (relating to extension of benefits).
          (IV) Section 6D (relating to continuation or conversion of
        coverage).
          (V) Section 6E (relating to discontinuance and replacement of
        policies).
          (VI) Section 7 (relating to unintentional lapse).
          (VII) Section 8 (relating to disclosure), other than sections
        8F, 8G, 8H, and 8I thereof.
          (VIII) Section 9 (relating to required disclosure of rating
        practices to consumer).
          (IX) Section 11 (relating to prohibitions against post-claims
        underwriting).
          (X) Section 12 (relating to minimum standards).
          (XI) Section 14 (relating to application forms and
        replacement coverage).
          (XII) Section 15 (relating to reporting requirements).
          (XIII) Section 22 (relating to filing requirements for
        marketing).
          (XIV) Section 23 (relating to standards for marketing),
        including inaccurate completion of medical histories, other
        than paragraphs (1), (6), and (9) of section 23C.
          (XV) Section 24 (relating to suitability).
          (XVI) Section 25 (relating to prohibition against preexisting
        conditions and probationary periods in replacement policies or
        certificates).
          (XVII) The provisions of section 26 relating to contingent
        nonforfeiture benefits, if the policyholder declines the offer
        of a nonforfeiture provision described in paragraph (4).
          (XVIII) Section 29 (relating to standard format outline of
        coverage).
          (XIX) Section 30 (relating to requirement to deliver
        shopper's guide).

        (ii) In the case of the model Act, the following:
          (I) Section 6C (relating to preexisting conditions).
          (II) Section 6D (relating to prior hospitalization).
          (III) The provisions of section 8 relating to contingent
        nonforfeiture benefits.
          (IV) Section 6F (relating to right to return).
          (V) Section 6G (relating to outline of coverage).
          (VI) Section 6H (relating to requirements for certificates
        under group plans).
          (VII) Section 6J (relating to policy summary).
          (VIII) Section 6K (relating to monthly reports on accelerated
        death benefits).
          (IX) Section 7 (relating to incontestability period).

        (B) For purposes of this paragraph and paragraph (1)(C) - 
          (i) the terms "model regulation" and "model Act" mean the
        long-term care insurance model regulation, and the long-term
        care insurance model Act, respectively, promulgated by the
        National Association of Insurance Commissioners (as adopted as
        of October 2000);
          (ii) any provision of the model regulation or model Act
        listed under subparagraph (A) shall be treated as including any
        other provision of such regulation or Act necessary to
        implement the provision; and
          (iii) with respect to a long-term care insurance policy
        issued in a State, the policy shall be deemed to meet
        applicable requirements of the model regulation or the model
        Act if the State plan amendment under paragraph (1)(C)(iii)
        provides that the State insurance commissioner for the State
        certifies (in a manner satisfactory to the Secretary) that the
        policy meets such requirements.

        (C) Not later than 12 months after the National Association of
      Insurance Commissioners issues a revision, update, or other
      modification of a model regulation or model Act provision
      specified in subparagraph (A), or of any provision of such
      regulation or Act that is substantively related to a provision
      specified in such subparagraph, the Secretary shall review the
      changes made to the provision, determine whether incorporating
      such changes into the corresponding provision specified in such
      subparagraph would improve qualified State long-term care
      insurance partnerships, and if so, shall incorporate the changes
      into such provision.
    (c) Taking into account certain transfers of assets
      (1)(A) In order to meet the requirements of this subsection for
    purposes of section 1396a(a)(18) of this title, the State plan must
    provide that if an institutionalized individual or the spouse of
    such an individual (or, at the option of a State, a
    noninstitutionalized individual or the spouse of such an
    individual) disposes of assets for less than fair market value on
    or after the look-back date specified in subparagraph (B)(i), the
    individual is ineligible for medical assistance for services
    described in subparagraph (C)(i) (or, in the case of a
    noninstitutionalized individual, for the services described in
    subparagraph (C)(ii)) during the period beginning on the date
    specified in subparagraph (D) and equal to the number of months
    specified in subparagraph (E).
      (B)(i) The look-back date specified in this subparagraph is a
    date that is 36 months (or, in the case of payments from a trust or
    portions of a trust that are treated as assets disposed of by the
    individual pursuant to paragraph (3)(A)(iii) or (3)(B)(ii) of
    subsection (d) of this section or in the case of any other disposal
    of assets made on or after February 8, 2006, 60 months) before the
    date specified in clause (ii).
      (ii) The date specified in this clause, with respect to - 
        (I) an institutionalized individual is the first date as of
      which the individual both is an institutionalized individual and
      has applied for medical assistance under the State plan, or
        (II) a noninstitutionalized individual is the date on which the
      individual applies for medical assistance under the State plan
      or, if later, the date on which the individual disposes of assets
      for less than fair market value.

      (C)(i) The services described in this subparagraph with respect
    to an institutionalized individual are the following:
        (I) Nursing facility services.
        (II) A level of care in any institution equivalent to that of
      nursing facility services.
        (III) Home or community-based services furnished under a waiver
      granted under subsection (c) or (d) of section 1396n of this
      title.

      (ii) The services described in this subparagraph with respect to
    a noninstitutionalized individual are services (not including any
    services described in clause (i)) that are described in paragraph
    (7), (22), or (24) of section 1396d(a) of this title, and, at the
    option of a State, other long-term care services for which medical
    assistance is otherwise available under the State plan to
    individuals requiring long-term care.
      (D)(i) In the case of a transfer of asset made before February 8,
    2006, the date specified in this subparagraph is the first day of
    the first month during or after which assets have been transferred
    for less than fair market value and which does not occur in any
    other periods of ineligibility under this subsection.
      (ii) In the case of a transfer of asset made on or after February
    8, 2006, the date specified in this subparagraph is the first day
    of a month during or after which assets have been transferred for
    less than fair market value, or the date on which the individual is
    eligible for medical assistance under the State plan and would
    otherwise be receiving institutional level care described in
    subparagraph (C) based on an approved application for such care but
    for the application of the penalty period, whichever is later, and
    which does not occur during any other period of ineligibility under
    this subsection.
      (E)(i) With respect to an institutionalized individual, the
    number of months of ineligibility under this subparagraph for an
    individual shall be equal to - 
        (I) the total, cumulative uncompensated value of all assets
      transferred by the individual (or individual's spouse) on or
      after the look-back date specified in subparagraph (B)(i),
      divided by
        (II) the average monthly cost to a private patient of nursing
      facility services in the State (or, at the option of the State,
      in the community in which the individual is institutionalized) at
      the time of application.

      (ii) With respect to a noninstitutionalized individual, the
    number of months of ineligibility under this subparagraph for an
    individual shall not be greater than a number equal to - 
        (I) the total, cumulative uncompensated value of all assets
      transferred by the individual (or individual's spouse) on or
      after the look-back date specified in subparagraph (B)(i),
      divided by
        (II) the average monthly cost to a private patient of nursing
      facility services in the State (or, at the option of the State,
      in the community in which the individual is institutionalized) at
      the time of application.

      (iii) The number of months of ineligibility otherwise determined
    under clause (i) or (ii) with respect to the disposal of an asset
    shall be reduced - 
        (I) in the case of periods of ineligibility determined under
      clause (i), by the number of months of ineligibility applicable
      to the individual under clause (ii) as a result of such disposal,
      and
        (II) in the case of periods of ineligibility determined under
      clause (ii), by the number of months of ineligibility applicable
      to the individual under clause (i) as a result of such disposal.

      (iv) A State shall not round down, or otherwise disregard any
    fractional period of ineligibility determined under clause (i) or
    (ii) with respect to the disposal of assets.
      (F) For purposes of this paragraph, the purchase of an annuity
    shall be treated as the disposal of an asset for less than fair
    market value unless - 
        (i) the State is named as the remainder beneficiary in the
      first position for at least the total amount of medical
      assistance paid on behalf of the institutionalized individual
      under this subchapter; or
        (ii) the State is named as such a beneficiary in the second
      position after the community spouse or minor or disabled child
      and is named in the first position if such spouse or a
      representative of such child disposes of any such remainder for
      less than fair market value.

      (G) For purposes of this paragraph with respect to a transfer of
    assets, the term "assets" includes an annuity purchased by or on
    behalf of an annuitant who has applied for medical assistance with
    respect to nursing facility services or other long-term care
    services under this subchapter unless - 
        (i) the annuity is - 
          (I) an annuity described in subsection (b) or (q) of section
        408 of the Internal Revenue Code of 1986; or
          (II) purchased with proceeds from - 
            (aa) an account or trust described in subsection (a), (c),
          or (p) of section 408 of such Code;
            (bb) a simplified employee pension (within the meaning of
          section 408(k) of such Code); or
            (cc) a Roth IRA described in section 408A of such Code; or

        (ii) the annuity - 
          (I) is irrevocable and nonassignable;
          (II) is actuarially sound (as determined in accordance with
        actuarial publications of the Office of the Chief Actuary of
        the Social Security Administration); and
          (III) provides for payments in equal amounts during the term
        of the annuity, with no deferral and no balloon payments made.

      (H) Notwithstanding the preceding provisions of this paragraph,
    in the case of an individual (or individual's spouse) who makes
    multiple fractional transfers of assets in more than 1 month for
    less than fair market value on or after the applicable look-back
    date specified in subparagraph (B), a State may determine the
    period of ineligibility applicable to such individual under this
    paragraph by - 
        (i) treating the total, cumulative uncompensated value of all
      assets transferred by the individual (or individual's spouse)
      during all months on or after the look-back date specified in
      subparagraph (B) as 1 transfer for purposes of clause (i) or (ii)
      (as the case may be) of subparagraph (E); and
        (ii) beginning such period on the earliest date which would
      apply under subparagraph (D) to any of such transfers.

      (I) For purposes of this paragraph with respect to a transfer of
    assets, the term "assets" includes funds used to purchase a
    promissory note, loan, or mortgage unless such note, loan, or
    mortgage - 
        (i) has a repayment term that is actuarially sound (as
      determined in accordance with actuarial publications of the
      Office of the Chief Actuary of the Social Security
      Administration);
        (ii) provides for payments to be made in equal amounts during
      the term of the loan, with no deferral and no balloon payments
      made; and
        (iii) prohibits the cancellation of the balance upon the death
      of the lender.

    In the case of a promissory note, loan, or mortgage that does not
    satisfy the requirements of clauses (i) through (iii), the value of
    such note, loan, or mortgage shall be the outstanding balance due
    as of the date of the individual's application for medical
    assistance for services described in subparagraph (C).
      (J) For purposes of this paragraph with respect to a transfer of
    assets, the term "assets" includes the purchase of a life estate
    interest in another individual's home unless the purchaser resides
    in the home for a period of at least 1 year after the date of the
    purchase.
      (2) An individual shall not be ineligible for medical assistance
    by reason of paragraph (1) to the extent that - 
        (A) the assets transferred were a home and title to the home
      was transferred to - 
          (i) the spouse of such individual;
          (ii) a child of such individual who (I) is under age 21, or
        (II) (with respect to States eligible to participate in the
        State program established under subchapter XVI of this chapter)
        is blind or permanently and totally disabled, or (with respect
        to States which are not eligible to participate in such
        program) is blind or disabled as defined in section 1382c of
        this title;
          (iii) a sibling of such individual who has an equity interest
        in such home and who was residing in such individual's home for
        a period of at least one year immediately before the date the
        individual becomes an institutionalized individual; or
          (iv) a son or daughter of such individual (other than a child
        described in clause (ii)) who was residing in such individual's
        home for a period of at least two years immediately before the
        date the individual becomes an institutionalized individual,
        and who (as determined by the State) provided care to such
        individual which permitted such individual to reside at home
        rather than in such an institution or facility;

        (B) the assets - 
          (i) were transferred to the individual's spouse or to another
        for the sole benefit of the individual's spouse,
          (ii) were transferred from the individual's spouse to another
        for the sole benefit of the individual's spouse,
          (iii) were transferred to, or to a trust (including a trust
        described in subsection (d)(4) of this section) established
        solely for the benefit of, the individual's child described in
        subparagraph (A)(ii)(II), or
          (iv) were transferred to a trust (including a trust described
        in subsection (d)(4) of this section) established solely for
        the benefit of an individual under 65 years of age who is
        disabled (as defined in section 1382c(a)(3) of this title);

        (C) a satisfactory showing is made to the State (in accordance
      with regulations promulgated by the Secretary) that (i) the
      individual intended to dispose of the assets either at fair
      market value, or for other valuable consideration, (ii) the
      assets were transferred exclusively for a purpose other than to
      qualify for medical assistance, or (iii) all assets transferred
      for less than fair market value have been returned to the
      individual; or
        (D) the State determines, under procedures established by the
      State (in accordance with standards specified by the Secretary),
      that the denial of eligibility would work an undue hardship as
      determined on the basis of criteria established by the Secretary.

    The procedures established under subparagraph (D) shall permit the
    facility in which the institutionalized individual is residing to
    file an undue hardship waiver application on behalf of the
    individual with the consent of the individual or the personal
    representative of the individual. While an application for an undue
    hardship waiver is pending under subparagraph (D) in the case of an
    individual who is a resident of a nursing facility, if the
    application meets such criteria as the Secretary specifies, the
    State may provide for payments for nursing facility services in
    order to hold the bed for the individual at the facility, but not
    in excess of payments for 30 days.
      (3) For purposes of this subsection, in the case of an asset held
    by an individual in common with another person or persons in a
    joint tenancy, tenancy in common, or similar arrangement, the asset
    (or the affected portion of such asset) shall be considered to be
    transferred by such individual when any action is taken, either by
    such individual or by any other person, that reduces or eliminates
    such individual's ownership or control of such asset.
      (4) A State (including a State which has elected treatment under
    section 1396a(f) of this title) may not provide for any period of
    ineligibility for an individual due to transfer of resources for
    less than fair market value except in accordance with this
    subsection. In the case of a transfer by the spouse of an
    individual which results in a period of ineligibility for medical
    assistance under a State plan for such individual, a State shall,
    using a reasonable methodology (as specified by the Secretary),
    apportion such period of ineligibility (or any portion of such
    period) among the individual and the individual's spouse if the
    spouse otherwise becomes eligible for medical assistance under the
    State plan.
      (5) In this subsection, the term "resources" has the meaning
    given such term in section 1382b of this title, without regard to
    the exclusion described in subsection (a)(1) thereof.
    (d) Treatment of trust amounts
      (1) For purposes of determining an individual's eligibility for,
    or amount of, benefits under a State plan under this subchapter,
    subject to paragraph (4), the rules specified in paragraph (3)
    shall apply to a trust established by such individual.
      (2)(A) For purposes of this subsection, an individual shall be
    considered to have established a trust if assets of the individual
    were used to form all or part of the corpus of the trust and if any
    of the following individuals established such trust other than by
    will:
        (i) The individual.
        (ii) The individual's spouse.
        (iii) A person, including a court or administrative body, with
      legal authority to act in place of or on behalf of the individual
      or the individual's spouse.
        (iv) A person, including any court or administrative body,
      acting at the direction or upon the request of the individual or
      the individual's spouse.

      (B) In the case of a trust the corpus of which includes assets of
    an individual (as determined under subparagraph (A)) and assets of
    any other person or persons, the provisions of this subsection
    shall apply to the portion of the trust attributable to the assets
    of the individual.
      (C) Subject to paragraph (4), this subsection shall apply without
    regard to - 
        (i) the purposes for which a trust is established,
        (ii) whether the trustees have or exercise any discretion under
      the trust,
        (iii) any restrictions on when or whether distributions may be
      made from the trust, or
        (iv) any restrictions on the use of distributions from the
      trust.

      (3)(A) In the case of a revocable trust - 
        (i) the corpus of the trust shall be considered resources
      available to the individual,
        (ii) payments from the trust to or for the benefit of the
      individual shall be considered income of the individual, and
        (iii) any other payments from the trust shall be considered
      assets disposed of by the individual for purposes of subsection
      (c) of this section.

      (B) In the case of an irrevocable trust - 
        (i) if there are any circumstances under which payment from the
      trust could be made to or for the benefit of the individual, the
      portion of the corpus from which, or the income on the corpus
      from which, payment to the individual could be made shall be
      considered resources available to the individual, and payments
      from that portion of the corpus or income - 
          (I) to or for the benefit of the individual, shall be
        considered income of the individual, and
          (II) for any other purpose, shall be considered a transfer of
        assets by the individual subject to subsection (c) of this
        section; and

        (ii) any portion of the trust from which, or any income on the
      corpus from which, no payment could under any circumstances be
      made to the individual shall be considered, as of the date of
      establishment of the trust (or, if later, the date on which
      payment to the individual was foreclosed) to be assets disposed
      by the individual for purposes of subsection (c) of this section,
      and the value of the trust shall be determined for purposes of
      such subsection by including the amount of any payments made from
      such portion of the trust after such date.

      (4) This subsection shall not apply to any of the following
    trusts:
        (A) A trust containing the assets of an individual under age 65
      who is disabled (as defined in section 1382c(a)(3) of this title)
      and which is established for the benefit of such individual by a
      parent, grandparent, legal guardian of the individual, or a court
      if the State will receive all amounts remaining in the trust upon
      the death of such individual up to an amount equal to the total
      medical assistance paid on behalf of the individual under a State
      plan under this subchapter.
        (B) A trust established in a State for the benefit of an
      individual if - 
          (i) the trust is composed only of pension, Social Security,
        and other income to the individual (and accumulated income in
        the trust),
          (ii) the State will receive all amounts remaining in the
        trust upon the death of such individual up to an amount equal
        to the total medical assistance paid on behalf of the
        individual under a State plan under this subchapter; and
          (iii) the State makes medical assistance available to
        individuals described in section 1396a(a)(10)(A)(ii)(V) of this
        title, but does not make such assistance available to
        individuals for nursing facility services under section
        1396a(a)(10)(C) of this title.

        (C) A trust containing the assets of an individual who is
      disabled (as defined in section 1382c(a)(3) of this title) that
      meets the following conditions:
          (i) The trust is established and managed by a non-profit
        association.
          (ii) A separate account is maintained for each beneficiary of
        the trust, but, for purposes of investment and management of
        funds, the trust pools these accounts.
          (iii) Accounts in the trust are established solely for the
        benefit of individuals who are disabled (as defined in section
        1382c(a)(3) of this title) by the parent, grandparent, or legal
        guardian of such individuals, by such individuals, or by a
        court.
          (iv) To the extent that amounts remaining in the
        beneficiary's account upon the death of the beneficiary are not
        retained by the trust, the trust pays to the State from such
        remaining amounts in the account an amount equal to the total
        amount of medical assistance paid on behalf of the beneficiary
        under the State plan under this subchapter.

      (5) The State agency shall establish procedures (in accordance
    with standards specified by the Secretary) under which the agency
    waives the application of this subsection with respect to an
    individual if the individual establishes that such application
    would work an undue hardship on the individual as determined on the
    basis of criteria established by the Secretary.
      (6) The term "trust" includes any legal instrument or device that
    is similar to a trust but includes an annuity only to such extent
    and in such manner as the Secretary specifies.
    (e) Disclosure and treatment of annuities
      (1) In order to meet the requirements of this section for
    purposes of section 1396a(a)(18) of this title, a State shall
    require, as a condition for the provision of medical assistance for
    services described in subsection (c)(1)(C)(i) (relating to long-
    term care services) for an individual, the application of the
    individual for such assistance (including any recertification of
    eligibility for such assistance) shall disclose a description of
    any interest the individual or community spouse has in an annuity
    (or similar financial instrument, as may be specified by the
    Secretary), regardless of whether the annuity is irrevocable or is
    treated as an asset. Such application or recertification form shall
    include a statement that under paragraph (2) the State becomes a
    remainder beneficiary under such an annuity or similar financial
    instrument by virtue of the provision of such medical assistance.
      (2)(A) In the case of disclosure concerning an annuity under
    subsection (c)(1)(F), the State shall notify the issuer of the
    annuity of the right of the State under such subsection as a
    preferred remainder beneficiary in the annuity for medical
    assistance furnished to the individual. Nothing in this paragraph
    shall be construed as preventing such an issuer from notifying
    persons with any other remainder interest of the State's remainder
    interest under such subsection.
      (B) In the case of such an issuer receiving notice under
    subparagraph (A), the State may require the issuer to notify the
    State when there is a change in the amount of income or principal
    being withdrawn from the amount that was being withdrawn at the
    time of the most recent disclosure described in paragraph (1). A
    State shall take such information into account in determining the
    amount of the State's obligations for medical assistance or in the
    individual's eligibility for such assistance.
      (3) The Secretary may provide guidance to States on categories of
    transactions that may be treated as a transfer of asset for less
    than fair market value.
      (4) Nothing in this subsection shall be construed as preventing a
    State from denying eligibility for medical assistance for an
    individual based on the income or resources derived from an annuity
    described in paragraph (1).
    (f) Disqualification for long-term care assistance for individuals
      with substantial home equity
      (1)(A) Notwithstanding any other provision of this subchapter,
    subject to subparagraphs (B) and (C) of this paragraph and
    paragraph (2), in determining eligibility of an individual for
    medical assistance with respect to nursing facility services or
    other long-term care services, the individual shall not be eligible
    for such assistance if the individual's equity interest in the
    individual's home exceeds $500,000.
      (B) A State may elect, without regard to the requirements of
    section 1396a(a)(1) of this title (relating to statewideness) and
    section 1396a(a)(10)(B) of this title (relating to comparability),
    to apply subparagraph (A) by substituting for "$500,000", an amount
    that exceeds such amount, but does not exceed $750,000.
      (C) The dollar amounts specified in this paragraph shall be
    increased, beginning with 2011, from year to year based on the
    percentage increase in the consumer price index for all urban
    consumers (all items; United States city average), rounded to the
    nearest $1,000.
      (2) Paragraph (1) shall not apply with respect to an individual
    if - 
        (A) the spouse of such individual, or
        (B) such individual's child who is under age 21, or (with
      respect to States eligible to participate in the State program
      established under subchapter XVI) is blind or permanently and
      totally disabled, or (with respect to States which are not
      eligible to participate in such program) is blind or disabled as
      defined in section 1382c of this title,

    is lawfully residing in the individual's home.
      (3) Nothing in this subsection shall be construed as preventing
    an individual from using a reverse mortgage or home equity loan to
    reduce the individual's total equity interest in the home.
      (4) The Secretary shall establish a process whereby paragraph (1)
    is waived in the case of a demonstrated hardship.
    (g) Treatment of entrance fees of individuals residing in
      continuing care retirement communities
      (1) In general
        For purposes of determining an individual's eligibility for, or
      amount of, benefits under a State plan under this subchapter, the
      rules specified in paragraph (2) shall apply to individuals
      residing in continuing care retirement communities or life care
      communities that collect an entrance fee on admission from such
      individuals.
      (2) Treatment of entrance fee
        For purposes of this subsection, an individual's entrance fee
      in a continuing care retirement community or life care community
      shall be considered a resource available to the individual to the
      extent that - 
          (A) the individual has the ability to use the entrance fee,
        or the contract provides that the entrance fee may be used, to
        pay for care should other resources or income of the individual
        be insufficient to pay for such care;
          (B) the individual is eligible for a refund of any remaining
        entrance fee when the individual dies or terminates the
        continuing care retirement community or life care community
        contract and leaves the community; and
          (C) the entrance fee does not confer an ownership interest in
        the continuing care retirement community or life care
        community.
    (h) Definitions
      In this section, the following definitions shall apply:
        (1) The term "assets", with respect to an individual, includes
      all income and resources of the individual and of the
      individual's spouse, including any income or resources which the
      individual or such individual's spouse is entitled to but does
      not receive because of action - 
          (A) by the individual or such individual's spouse,
          (B) by a person, including a court or administrative body,
        with legal authority to act in place of or on behalf of the
        individual or such individual's spouse, or
          (C) by any person, including any court or administrative
        body, acting at the direction or upon the request of the
        individual or such individual's spouse.

        (2) The term "income" has the meaning given such term in
      section 1382a of this title.
        (3) The term "institutionalized individual" means an individual
      who is an inpatient in a nursing facility, who is an inpatient in
      a medical institution and with respect to whom payment is made
      based on a level of care provided in a nursing facility, or who
      is described in section 1396a(a)(10)(A)(ii)(VI) of this title.
        (4) The term "noninstitutionalized individual" means an
      individual receiving any of the services specified in subsection
      (c)(1)(C)(ii) of this section.
        (5) The term "resources" has the meaning given such term in
      section 1382b of this title, without regard (in the case of an
      institutionalized individual) to the exclusion described in
      subsection (a)(1) of such section.