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CMS approves extension of spousal impoverishment transfers to same sex spouses and registered domestic partners


In a May 18, 2012 letter to the DHCS Medi-Cal Eligibility Division, CMS approved the implementation of AB 641 (Feuer), which would extend the spousal impoverishment Community Spouse Resource Allowance (CSRA) and Minimum Monthly Maintenance Need Allowance (MMMNA) transfers to same sex spouses and registered domestic partners. The CMA letter was in response to a January 19, 2012 request from the DHCS to expand the list of circumstances that qualify for the undue hardship exception to the transfer of assets penalty for same sex partners and registered domestic partners.

AB 641 (Feuer), signed into law in September 2011, was drafted in response to the June 11, 2011 State Medicaid Director's letter permitting states to adopt hardship criteria that recognizes that imposing transfer of asset penalties on the basis of transfer of the ownership of a home to a same-sex spouse or domestic partner would constitute an undue hardship. In approving the extension of hardship provisions to the transfer of the CSRA and MMMNA for same sex spouses and registered domestic partners as provided in AB 641, the CMA letter states: "While the June 2011 SMDL specifically refers to transfers of ownership interests in a shared home, the flexibility that States have in determining the criteria for an undue hardship includes transfers of assets other than the home made by same-sex spouses or domestic partners." Currently, the spousal asset and income protections are available to same sex spouses and registered domestic partners under the State-only Medi-Cal program, meaning that no federal financial participation is available to the state if it allows the spousal transfer of asset limits (CSRA) or the income allocation (MMMNA). The community spouse benefits under the state-only program are limited and end once the institutionalized spouse or partner is qualified as aged or disabled.

Although AB 641 specifies that the state shall request that the effective date of approval be January 1, 2012, the CMS letter does not specify the effective date. We presume, however, that the CMS approval extends to retroactivity.

As for implementation, AB 641 does provide that the state can implement the provisions via All County Letter or similar instructions, without taking regulatory action - which should expedite the implementation.

For the text of the applicable provisions of AB 641, see the last section of AB 641 - section 8: http://www.leginfo.ca.gov/