Governor M. Jodi Rell today directed the withdrawal of Connecticut’s controversial plan to put limits on the Medicaid eligibility of elderly and disabled citizens when they need long-term care at nursing homes.

Governor Rell expressed concern about the potential negative impact on Connecticut residents applying for Medicaid coverage if the federal government decides to approve the state’s three-year-old application for a waiver of eligibility rules about the transfer of personal assets.

“Although the waiver application was submitted in good faith, I continue to hear concerns from Connecticut residents about their future ability to access services at skilled nursing facilities if Medicaid eligibility processes are changed,” the Governor said.  “As our frail elderly and disabled citizens attempt to navigate the complexity of the healthcare system, measures in the waiver application to change the process could be perceived as hindering the ability of individuals to access appropriate nursing home care.  In addition, while we are working to shore up the financial structure of our skilled nursing facilities, the waiver as crafted could lead to further deterioration of the already fragile financing of these facilities.”

Governor Rell noted that the federal Medicaid agency has held Connecticut’s waiver application without approval for more than three years.

“The fact that the Centers for Medicare and Medicaid Services did not expeditiously approve the state’s 2002 request is further indication that the waiver application may be viewed as problematic,” Governor Rell wrote to Social Services Commissioner Patricia A. Wilson-Coker, in directing that the waiver application be withdrawn.

Currently, the state uses a ‘look-back’ period of three years to assess Medicaid applicant financial transactions.  The purpose is to ensure that an applicant has not given away assets like a house or cash for the purpose of becoming poor enough to qualify for Medicaid.  If an applicant is found to have made an improper transfer of assets, there is a penalty (or waiting) period before Medicaid coverage is available.

The Department of Social Services’ 2002 waiver application sought to increase these measures.  The application proposed to expand the look-back period for real estate from three years to five years and to substantially change the waiting period for Medicaid eligibility when an improper cash transfer is verified.  Critics of the application expressed fears that poor elderly and people with disabilities would be denied health coverage inappropriately, and that nursing homes might lose revenue when a resident was denied coverage.

Governor Rell’s assessment essentially agreed that limited-income elderly and disabled residents might be put at risk of not being able to access critical nursing home care.  The Governor also cited the fragile financial structuring of the nursing home industry, a concern underlying her ground-breaking recommendation for a nursing home user tax that would raise revenue and federal reimbursement, while providing critical Medicaid rate relief for nursing homes and other community providers.

“The subject of increasing the ‘lookback’ period and the penalty period for qualifying for Medicaid is starting to be addressed on the federal level by President Bush and Congress,” the Governor said.  “I believe it is more appropriate for Connecticut public policy to be formulated as part of the national discussion on this issue, rather than through the advocacy of an individual waiver of federal law.  The public policy discussions beginning to unfold in Washington and in state capitals will guide Connecticut’s future position on this complex subject.”

Governor Rell said her administration would work with the General Assembly to repeal or amend statutes regarding the transfer-of-assets waiver application, as necessary.