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2005 Testimony

Testimony Before The House Human Services Committee

Clara Sue Price, Chairman

Regarding House Bill 1248 - Medicaid and transfers involving annuities

January 19, 2005

Chairman Price, members of the committee, I am Curtis Volesky, Director of Medicaid Eligibility for the Department of Human Services. The Department is taking a neutral position on HB 1248.

The Department recommends that the phrase “maximum monthly income amount” on page 2, line 31, and continuing on page 3, line 1, be changed to “minimum monthly maintenance needs allowance,” to be consistent and clear. This subsection of the bill already references the “minimum monthly maintenance needs allowance” on page 2, lines 26 and 27. The phrase “maximum monthly income amount” is not used in federal or state laws or policies, and it is our understanding that the intent was to reference the “minimum monthly maintenance needs allowance,” as identified in the subsequent federal reference [42 U.S.C. 1396r-5].

The Department is in support of naming the Department of Human Services as the primary beneficiary in subsection 5; however, we are concerned that its effectiveness may be limited. Subsection 4(e) does not require annuities to have a guarantee period. Accordingly, any annuities that only pay out for the life of the annuitant will terminate upon the annuitant's death, with no further payments due. Such annuities may be encouraged because they may pay a slightly higher monthly benefit, and because the primary beneficiary is the department. Requiring a guarantee period equal to the number of years from the recognized life expectancy table for an individual of the annuitant's age would make estate recovery collections more likely.

I will be glad to answer any questions regarding my testimony. Thank you.


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