BILL NUMBER:S6226                REVISED 02/01/12

TITLE OF BILL:
An act
to amend the social services law, in relation to the definition of
"estate" for purposes of medical assistance for the needy

PURPOSE:
This bill repeals those provisions of Chapter 59 of 2011,
one of the budget bills, which changed the definition of estate for
the purposes of recovering Medical Assistance benefits and gave the
Commissioner authority to promulgate regulations, on an emergency
basis if he chose, to include other property in which the individual
has an legal title or interest at the time of death including jointly
held property, retained life estates, and interests in trusts.

SUMMARY OF PROVISIONS:
Section 1 of the bill amends subdivision 6 of
section 369 of the social services law, as amended by section 53 of
part H of chapter 59 of the laws of 2011 to return the provisions of
the section to those that were in place prior to adoption of Chapter
59 in 2011.

Section 2 of the bill provides an immediate effective date.

JUSTIFICATION:
              

The implementation of the 2011 Budget provision has
demonstrated the impractical nature of new definition of "estate."
First, the Department of Health issued emergency regulations to
implement changes to the Medicaid estate recovery provisions as
adopted in the 2011-12 budget on September 8, 2011. Then, throughout
the Fall of 2011, extensive discussions were held to resolve problems
raised by the proposed regulations. A resolution was not reached and,
due to the numerous unresolved concerns, the emergency regulations
were not finalized. The Department of Health, however, is expected to
issue new regulations.

The primary concern with the emergency regulations is the proposed
retroactivity, which was not the intent of the legislature. Other
major concerns include the ambiguous definition of "estate" and
conflicts with current real property and inheritance laws. The
emergency regulations included life estates within its expanded
definition of "estate." However, this conflicts with current real
property law and would cause significant title issues when a life
estate interest is held in a chain of title. Moreover, heirs may
receive property affected by the expanded definition through the
intestate process, and property inherited in this manner cannot be
declined.
Therefore, heirs of families unable to pay for sophisticated estate
planning run the risk of incurring financial penalties. For the above

reasons, the most prudent course is to repeal the 2011-12 budget
language.

PRIOR LEGISLATIVE HISTORY:
New Bill.

FISCAL IMPLICATIONS:
The 2011-12 budget assumed savings of $1.1 million
attributable to this initiative. Given the months of non-enactment,
it is unlikely that number can be achieved in fiscal year 2011-2012.
Further, savings can be achieved by pursuing recoupment of Medicaid
costs under the original definition of estate or via the mechanism of
the global cap.

EFFECTIVE DATE:
This act shall take effect immediately.