SENATE BILL REPORT

SB 5011

BYSenators Newhouse, Matson, Sutherland, Bauer, Talmadge, Benitz, West and Rasmussen

Providing for allocation of assets of an institutionalized spouse.

Senate Committee on Health Care & Corrections

Senate Hearing Date(s):January 25, 1989; February 14, 1989

Majority Report:  That Substitute Senate Bill No. 5011 be substituted therefor, and the substitute bill do pass and be referred to Committee on Ways & Means.

      Signed by Senators West, Chairman; Smith, Vice Chairman; Amondson, Johnson, Kreidler, Niemi, Wojahn.

Senate Staff:Don Sloma (786-7414)

                  February 15, 1989

Senate Committee on Ways & Means

Senate Hearing Date(s):March 2, 1989

Majority Report:  That Second Substitute Senate Bill No. 5011 be substituted therefor, and the second substitute bill do pass.

      Signed by Senators McDonald, Chairman; Craswell, Vice Chairman; Amondson, Bailey, Bluechel, Cantu, Gaspard, Hayner, Johnson, Lee, Matson, Moore, Niemi, Owen, Saling, Smith, Talmadge, Warnke, Williams, Wojahn.

Senate Staff:Jan Sharar (786-7715)

                  March 6, 1989

AS REPORTED BY COMMITTEE ON WAYS & MEANS, MARCH 3, 1989

BACKGROUND:

Under state law, a person is ineligible for institutional medical assistance programs (nursing homes) if his or her assets have been transferred to someone other than a spouse up to two years previously.  There is no limitation on transfer of assets to a spouse.  However, the Department of Social and Health Services (DSHS) policies require that no more than 50 percent of the income of an institutionalized person may be retained by the spouse who remains in the community.  Average income of spouses who remain in the community is estimated by DSHS to be $325 per month. 

The Medicare Catastrophic Coverage Act of 1988 requires changes in the terms and methods of distributing assets prior to an applicant's admission, and places limits on the transfer of assets and income between spouses when one spouse applies for institutional medical assistance.  Maximum allowable assets are $60,000, excluding a house, car and personal possessions.  Maximum income is $1500 per month with certain adjustments.  Minimum assets are $12,000 and minimum income is $786 with certain adjustments.

SUMMARY:

The Department of Social and Health Services must establish the allocation of income and resources between an institutionalized spouse and a spouse who remains in the community when determining eligibility for medical assistance.  The department is to establish such allocations at the maximum levels permissible under federal law.

EFFECT OF PROPOSED SUBSTITUTE:

The department must establish the income allowance for the community spouse at one half the married couple's total income or the federal minimum income allowance, whichever is greater.

Current law regarding income and asset transfer procedures is repealed.  The department must amend its procedures to comply with federal requirements.

EFFECT OF PROPOSED SECOND SUBSTITUTE:

The department must establish the income allowance for the community spouse at the maximum amount allowed by the state appropriation or within funds available.

Appropriation:    none

Revenue:    none

Fiscal Note:      available

Effective Date:July 1, 1989

Senate Committee - Testified: HEALTH CARE & CORRECTIONS:  Evan Iverson, Senior Lobby; Charles Reed, DSHS

Senate Committee - Testified: WAYS & MEANS:  Charles Reed DSHS; Senator West (pro)