Young families face losing MA benefits over good intentions

Sometimes the best intentions can have the worst consequences.

Michael Garrity, a southwest Minneapolis resident, explained in written testimony to the House Health and Human Services Finance Committee Wednesday that his wife, Liza, has been in a group home for 14 years following a traumatic brain injury. It would be impossible for them to save for retirement if they lose Medical Assistance eligibility, he wrote.

“Please don’t suggest the third alternative, which goes against my faith and is very hard to rationalize. How can I possibly explain to my wife that divorce is our best option?” Garrity said.

Anne Henry, an attorney for the Minnesota Disability Law Center, said that at least 2,400 young Minnesota families face an impossible choice to prevent their spouse with home- and community-based care needs from losing MA eligibility: spend down their retirement and college savings accounts or consider a divorce to improve the spouse’s eligibility. The situation is due to a federal Affordable Care Act provision that was meant to prevent this issue.

Home- and community-based care services cover issues ranging from severe disabilities to mental illness.

Rep. Tony Albright (R-Prior Lake) sponsors HF3729, which would allow individuals to remain eligible for Medical Assistance even if a spouse’s retirement account or college savings account for a child under 25 exceeds the program’s asset limits.

WATCH Committee discussion of the bill on YouTube

The committee laid the bill over for possible omnibus bill inclusion. Sen. Melisa Franzen (DFL-Edina) sponsors SF3474, the companion bill, which awaits action by the Senate Health, Human Services and Housing Committee.

Albright said the bill would require an individual to apply for the benefits before they are 59 1/2, the age when people may begin drawing retirement funds, to prevent violation of other federal laws. The individuals would still receive benefits after that age provided they were previously approved and maintain their coverage.

Henry said the age limit is due to federal laws being aimed at retired or elderly couples in this situation, not the unique needs of young couples.

Minnesota has one of the most expansive anti-spousal impoverishment regulations in the country, Henry said, because it doesn’t count the accounts toward the asset limit.

The federal Affordable Care Act, passed in 2010, expanded federal anti-spousal impoverishment rules to all states regarding home and community-based care services receiving Medicaid funds. The change brought the rules to approximately eight states who didn’t have them, Henry said, but Minnesota’s situation meant the accounts were added back into the asset limit calculations.

Minnesota applied for a federal waiver in 2014 and was denied last summer.