Section 178.2. Definitions

The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:

Annuity—An investment contract or policy which gives the right to receive fixed, periodic payments, either for life or a term of years.

Applicant/recipient—A person who is applying for, or receiving, MA or a group of related persons who are living together and who choose to apply for, or receive, MA as one group.

Assets—Income and resources of the individual and of the individual’s spouse, including income or resources which the individual or the individual’s spouse is entitled to but does not receive because of action by one of the following:

(i) The individual or the individual’s spouse.

(ii) A person or a court or administrative body with legal authority to act in place of, or on behalf of, the individual or the individual’s spouse.

(iii) A person or a court or administrative body acting at the direction or upon the request of the individual or the individual’s spouse.

Burial reserve—Funds or other resources, whether revocable or irrevocable, held in trust or under contract with a financial institution or a funeral director and designated for burial expenses. The term may also be known as funeral reserves, funeral agreements, prepaid funeral agreements, burial funds, burial agreements or similar names.

Burial space—Conventional grave sites, crypts, burial drawers, mausoleums, urns and other repositories customarily used to deposit the remains of deceased persons.

Community spouse—The spouse living at home who has a spouse who had lived at home but is now an institutionalized spouse.

Disposition of property—The transfer of ownership of, or an interest in, a property. This can be accomplished by the sale, exchange or transfer of the title, or by diminishing the value of an interest through the placing of an encumbrance or by adding a person to the title.

Equity value—The FMV less legal encumbrances, including liens and mortgages.

FMV—Fair Market Value—The price which property can be expected to sell for on the open market or would have been expected to sell for on the open market in the geographic area in which the property is located.

Fair consideration—Compensation in cash or in kind which is approximately equal to the FMV of the transferred property.

IRC—Internal Revenue Code (26 U.S.C.A. § § 1—1043).

Immediate family—The child, the biological or adoptive parent of a child under 21 years of age, the spouse of the parent, and the brother, sister, stepbrother, step-sister, half-brother or half-sister who are under 21 years of age. The immediate family members must be living together.

Institutionalized individual/person—An individual who is receiving nursing facility care.

Institutionalized spouse—The spouse who is receiving skilled care, heavy care/intermediate services or intermediate care in a nursing facility or other medical institution, including services in an ICF/MR facility, for a period likely to last for at least 30 consecutive days.

Irrevocable trust—A trust which cannot, in any way, be revoked by the grantor.


Jointly-owned resources—Resources which have more than one owner.

LRR—Legally Responsible Relative—The spouse of a person, or the natural or adoptive parent of a child under the age of 21.

Liquid resources—Resources that are in cash or financial instruments which can normally be converted to cash. The term includes cash on hand, savings and checking accounts, stocks, bonds, mutual fund shares, money certificates, promissory notes and mortgages.

Look-back date/look-back period—The specified period of time immediately before the date of an institutionalized individual’s application for MA benefits which determines the earliest date on which a transfer of assets for less than FMV can result in ineligibility for MA.

MCCA—The Medicare Catastrophic Coverage Act of 1988 (Pub. L. 100-360, 102 Stat. 683) (July 1, 1988).

Motor vehicle—A passenger car, truck, motorcycle or other motor vehicle that can be used to transport persons or goods, and is of a type permitted to travel on highways of this Commonwealth.

NFC—Nursing Facility Care—Skilled care, heavy care/intermediate services or intermediate care in a nursing facility or other medical institution.

Nonliquid resources—Real or personal property not considered liquid resources.

Nonresident property—Real property that is not used as the principal place of residence by the applicant/recipient, his spouse or his dependent minor or incompetent adult children.

Parent—The natural or adoptive parent.

Personal property—Privately owned possessions which are not real property. The term includes cash, bank accounts, stocks, bonds, mortgages, cash value of life insurance policies, household furnishings, personal effects, motor vehicles, boats and Federal, State and local tax refunds.

Real property—Land, buildings, mobile homes and improvements thereto.

Rebuttable presumption—A rule of evidence which permits the Department to assume that when certain facts are true, other facts are true, without having proof of those other facts. The presumption is automatic, and can be disproved or rebutted only by the applicant/recipient presenting evidence at a prehearing conference or a Departmental fair hearing. If the applicant/recipient presents no evidence at the prehearing conference or at the fair hearing to disprove the presumption, the presumption remains unrebutted and stands.

Resident property—Real property used as the principle place of residence by the applicant/recipient, his spouse or his dependent minor or incompetent adult children.

Resource—Real or personal property which a person has or can make available for partial or total support, including equitable interests and partial interests. The term does not include credit.

Revocable trust—A trust which can be revoked by the grantor, including a trust which provides that it can be modified or terminated only by a court, and a trust which is called irrevocable but will terminate if some action is taken by the grantor.

SSI—Supplemental Security Income—The benefit amount paid to an eligible person or to an eligible person and his eligible spouse under Title XVI of the Social Security Act (42 U.S.C.A. § § 1381—1383d).

Spouse—A person who is married to another by legal ceremony or by common-law.

Trust—An arrangement in which a grantor transfers property to a trustee with the intention that it be held, managed or administered by the trustee for the benefit of the grantor or other designated individuals. The term also includes any legal instrument or device that is similar to a trust, but excludes trusts established by will, which are subject to § 178.4 (relating to treatment of resources for all categories of MA).

Trustee—An individual or entity such as an insurance company or bank that manages a trust.

UV—Uncompensated Value—The amount remaining after the FMV of a property at the time of transfer is reduced by the following amounts in the order listed:

(i) The cost of sale/transfer and encumbrances.

(ii) The amount of compensation received.

Undue hardship—Exists when denial of MA would deprive the individual of medical care and endanger the individual’s health or life; also exists when the individual or a financially dependent family member would be deprived of food, clothing, shelter or other necessities of life.

The provisions of this § 178.2 adopted August 26, 1988, effective November 1, 1988, 18 Pa.B. 3979; amended August 28, 1992, effective upon publication and apply retroactively to October 1, 1989, 22 Pa.B. 4432; amended December 23, 1994, effective December 24, 1994, and apply retroactively to January 4, 1991 and July 30, 1994, 24 Pa.B. 6423; amended June 15, 2001, effective June 16, 2001, 31 Pa.B. 3196. Immediately preceding text appears at serial pages (220367) to (220368) and (261249) to (261251).

Notation

Authority

The provisions of this § 178.2 amended under sections 201(2) and 403(b) of the Public Welfare Code (62 P. S. § § 201(2) and 403(b)).

Notes of Decisions

Fair Consideration

Nursing home resident’s act of ‘‘lending’’ available assets to a trust for less than fair consideration warranted denial of her application for Medical Assistance, where the resident was surrendering her principal for 4 years on unsecured loans for a sizeable amount of money and was receiving what amounted to a 2% monthly interest payment in return; thus, it was not apparent how the resident would receive any real benefit or consideration from the transaction (aside from the solace of transferring assets to her adult child, which is not of itself a protected transaction under the Medicaid law). Pyle v. Department of Public Welfare, 730 A.2d 1046 (Pa. Cmwlth. 1999).

Reasonable Steps

Election on behalf of an incapacitated husband against the provisions of his wife’s will was in husband’s best interests, where failure to take the election against the will could potentially compromise his entitlement to continued medical assistance in addition to denying him the benefit of the elective share. Estate of Wyinegar, 711 A.2d 492 (Pa. Super. 1998).

The principal of a testamentary discretionary support trust was an available resource to be considered in determining the beneficiary’s eligibility for MA. Commonwealth Bank and Trust Company, N.A. v. Department of Public Welfare, 563 A.2d 1299 (Pa. Cmwlth. 1989), appeal granted, 569 A.2d 1370 (Pa. 1990); order affirmed 598 A.2d 1279 (Pa. 1991).

The determination of whether a trust is an available resource for MA eligibility can only be made by evaluating each trust instrument and the circumstances surrounding its execution to determine the intent of the settlor. Snyder v. Department of Public Welfare, 556 A.2d 31 (Pa. Cmwlth. 1989); affirmed 598 A.2d 1283 (Pa. 1991).

Cross References

This section cited in 55 Pa. Code § 178.71 (relating to burial spaces); 55 Pa. Code § 178.84 (relating to resources of children under 21 years of age and families with children under 21 years of age); 55 Pa. Code § 178.161 (relating to personal property exclusions); 55 Pa. Code § 178.163 (relating to resources of children under 21 years of age and families with children under 21 years of age); 55 Pa. Code § 178.101 (relating to disposition of property and fair consideration provisions for transfer during the period of January 4, 1991, through July 29, 1994); 55 Pa. Code § 178.104 (relating to disposition of assets and fair consideration provisions for transfers on or after July 30, 1994); 55 Pa. Code § 178.121 (relating to general); 55 Pa. Code § 178.124 (relating to resource eligibility for the institutionalized spouse); 55 Pa. Code § 178.161 (relating to personal property exclusions); 55 Pa. Code § 178.171 (relating to disposition of property and fair consideration provisions for transfers during the period of January 4, 1991, through July 29, 1994); and 55 Pa. Code § 178.174 (relating to disposition of assets and fair consideration provisions for transfers on or after July 30, 1994).