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District of Columbia Medicaid Planning Guide

Published: Mar 19, 2020. Last Updated: Oct 5, 2022.

Introduction

The District of Columbia (DC) Medicaid program is one of the most complex in the nation, in part because DC is not a state and the DC Government is not the most organized or efficient of local governments. The program is a procedural nightmare in many ways: eligibility rules are largely incomprehensible to the uninitiated, and even some experienced attorneys find it difficult to decipher the cryptic and often contradictory regulations vs. rules. The DC Medicaid Manual, which is supposed to be relied on by Medicaid Case Workers and attorneys, is online, but is not kept up-to-date. For example, DC Medicaid regulations were changed drastically in 2016, but as of 2020 the DC Medicaid Manual has still not been updated to reflect the changes in these regulations, so deciphering the exact state of DC Medicaid rules, where the new regulations often contradict the Medicaid Manual, and vice versa, is an exercise of enormous complexity.

Numbers at a Glance

Divestment Penalty Divisors (updated July 1, 2020)

DC Penalty Divisor: $12,883.74

Individual Resource Allowance

DC: $4,000

Married Couple Resource Allowance

DC: $7,000

Monthly Personal Income Allowance for Nursing Home Residents

DC: $70

Shelter Standard

DC: $646.50

Standard Utility Allowance

DC: $305

Medicaid Home Equity Cap

DC: $893,000

Community Spouse Resource Allowance

Minimum Community Spouse Resource Allowance: $25,728

Maximum Community Spouse Resource Allowance: $128,640

Community Spouse Monthly Income Allowance

Maximum Allowed under Federal Law in DC: $3,216

Assets 

In DC, an unmarried applicant for Medicaid long-term care assistance may have no more than the Individual Resource Allowance set forth above in "countable resources" in his or her name in order to be "resource eligible" for Medicaid.

Income

DC is what is known as a "medically needy" state, which is distinct from an "income cap" state. If an applicant is medically in need of nursing home care, the applicant will qualify for Medicaid benefits (as long as the applicant is otherwise eligible) as long as the applicant's gross income is less than the private cost of the long term care. As a result, a Miller Trust or Qualified Income Trust is unnecessary in DC. The nursing home resident is still required to pay all of his or her income, less certain deductions, to the nursing home. The deductions include the Resource Allowance set forth above, a deduction for any uncovered medical costs (including medical insurance premiums), and, if the applicant is married, an allowance which in some cases may be paid to the spouse that continues to live at home (the Community Spouse).

Fortunately, an experienced elder law attorney can help a married couple shift income from the nursing home spouse to the community spouse.

Community-Based Care Waiver Services

DC has unlimited Community-Based Care (CBC) Waiver services for the elderly (called the EPD Waiver), which can be authorized as an alternative to nursing facility care when the individual meets the clinical criteria for needing nursing home level-of-care. It covers up to 17 hours per day of in-home care. Most of the financial eligibility requirements for CBC applicants are the same as the requirements for nursing home applicants. This includes resource eligibility, income eligibility, and transfer eligibility. However, the income eligibility rules are more complex for the EPD Waiver than for nursing home Medicaid.

Treatment of the Primary Residence

For Medicaid payment of nursing home long-term care, the rules are different depending on whether you read the regulations or the Medicaid Manual. In the Medicaid Manual, the applicant's principal residence is excluded from countable resources only for the first six months of continuous institutionalization, provided the applicant intends to return home and provided the equity in the home property does not exceed the home equity limit stated above. Regardless of the amount of home equity, after six months of continuous institutionalization, technically the nursing home resident's home will become a countable resource, unless the home is occupied by a spouse, dependent child under age 21, or a blind or disabled child.

However, DC has never in fact applied the above rule rendering home property available after six months; caseworkers have simply ignored the home after initial eligibility and on re-certification, so that the home is simply disregarded. And the regulations enacted in 2016 simply state that the house is an exempt asset.

DC has an aggressive estate recovery program, but as a practical matter there are ways to protect the home from Estate Recovery using an experienced Elder Law Attorney.

Protections for the Community Spouse

Community Spouse Resource Allowance (CSRA)

All countable assets owned by the married couple as of the first day of the month that the applicant becomes institutionalized, regardless of how the assets are titled, are divided, for purpose of calculation, into equal halves. One-half of the countable assets, up to the maximum Community Spouse Resource Allowance (CSRA) and subject to the minimum CSRA, is allocated to the community spouse. The other half of the countable assets is allocated to the nursing home spouse, and must be spent (or protected) until only the Individual Resource Allowance remains, at which time the nursing home spouse will then qualify for Medicaid.

Fortunately, an experienced Elder Law attorney can typically vastly increase the value of assets that a married couple can protect by using a variety of asset protection strategies.

Monthly Maintenance Needs Allowance (MMNA)

The MMNA (Monthly Maintenance Needs Allowance) in DC is called the Community Spouse Monthly Income Allowance.

DC permits all spouses to have the maximum spousal income allowance permitted under Federal law, which is listed above.

Spousal Refusal

DC Medicaid allows spousal refusal, disregarding all assets of the Community Spouse so long as the Community Spouse assigns all support rights to the District.

Annuities

DC has no policy on the treatment of annuities. Because of its generous application of “just say no,” annuities are not needed to enable married individuals to qualify for benefits. And notwithstanding the Deficit Reduction Act of 2005, DC appears to accept balloon annuities and does not require that it be named a contingent beneficiary after a spouse or disabled child.

Estate Recovery

DC routinely filed claims for all services, but withdraws inappropriate claims when challenged. DC does not pursue estate recovery if there is a surviving spouse or disabled child, or where recovery would result in undue hardship. DC has a hardship standard that is strict and somewhat incomprehensible. It also has draconian deadline requirements that may trip up the unwary personal representative or estate planning lawyer. Under federal law, DC is required to make a claim against a deceased enrollee’s estate provided the individual was age 55 or over; however, DC also makes claims against estates of individuals who receive Medicaid services while under age 55.

In reality, working with an experienced Elder Law Attorney, there are several ways to avoid DC Medicaid Estate Recovery.

Relevant Federal and State Statutes, Regulations, and Rules

  1. Social Security Act Title XIX, 42 USC § 1396 et seq.

  2. 42 USC § 1396p (transfer of assets / estate recovery / trusts).

  3. 42 USC § 1396r-5 (special rules applicable to an institutionalized spouse who has a "community spouse").

  4. Deficit Reduction Act of 2005, Pub. L. No. 109-171 ("DRA"), signed into law on February 8, 2006. The provisions of DRA dealing with the changes to eligibility for Medicaid long-term care are contained at §§ 6011 - 6021, and 6036 of the DRA.

  5. 42 CFR 430 et seq.

  6. DC’s Medicaid Rules and Regulations are set forth in the DC Regulations at https://www.dcregs.dc.gov/Common/DCMR/RuleList.aspx?ChapterNum=29-98, and the Policy Manual at https://dhs.dc.gov/publication/esa-policy-manual.

About the Authors

Evan Farr

Esq., CELA, CAP

Farr Law Firm, P.C.

www.FarrLawFirm.com (703) 691-1888

Evan Farr has decades of experience as an elder law attorney and is licensed to practice law in Virginia, Maryland and the District of Columbia. His specialties include Medicaid planning, Veterans Aid and Attendance Benefits planning and estate planning. He graduated from the University of Pennsylvania in 1984 and the College of William & Mary Law School in 1987. He is a Charter Member of the Academy of Special Needs Planners and one of just 100 members of the National Academy of Elder Law Attorneys Council of Advanced Practitioners. He is also the past President of the Virginia Academy of Elder Law Attorneys and past Chair of the Virginia Bar Association Elder Law Section. He is also a member of the Virginia and District of Columbia Bar Associations. Finally, Elder Guide recommends each of his four best selling books on elder law: How to Protect Your Assets From Probate PLUS Lawsuits PLUS Nursing Home Expenses with the Living Trust Plus®; the Nursing Home Survival Guide; Protect & Defend; and Protecting Your Assets from Probate and Long-Term Care: Don’t Let the System Bankrupt You and Your Loved Ones.

Alicia is an experienced estate planning attorney. She is licensed in both the District of Columbia and Virginia. Alicia has been featured in both the Virginia Business Legal Elite and in Super Lawyers as a Rising Star. She is a graduate of both the College of William & Mary and George Mason University School of Law. Alicia is also a frequent lecturer at Continuing Legal Education classes for other attorneys on the topics of Elder Law, Estate Planning, Asset Protection Trusts, and Special Needs Planning.