A bill intended to close a loophole that allows individuals to shield assets from reimbursement for Medicaid-related services was amended and advanced from select file May 4.
LB72, sponsored by Columbus Sen. Paul Schumacher, would prohibit a trustee of a revocable trust that has become irrevocable due to the death of the trustor from transferring trust property to a beneficiary prior to satisfaction of all claims for Medicaid reimbursement.
The state Department of Health and Human Services (DHHS) could waive the restrictions within 60 days if there are no claims for Medicaid reimbursement or insufficient assets to satisfy the claims.
The bill also would require that if a petition were filed to determine inheritance tax, notice of the hearing would be sent to DHHS if the decedent was 55 or older or resided in a medical institution that potentially would subject them to debt for Medicaid services.
Schumacher offered an amendment on select file that would allow certain trustees to distribute assets from a trust prior to receiving a waiver from DHHS if the trustee signs a recital under oath that no claims for medical assistance exist.
The amendment also adds language mirroring federal law, which reiterates that an estate includes assets in a trust to be distributed upon death of a trustor, and other clarifying language.
Schumacher said the provisions would bring Nebraska in line with 40 other states and are a first step toward designing a program to help the state recapture money owed for Medicaid services.
“This begins the process by letting DHHS know that there is money moving that they may be entitled to,” he said.
Norfolk Sen. Jim Scheer said he had been in contact with estate attorneys who would prefer that lawmakers conduct an interim study and come back next session with a new bill.
Following adoption of the amendment on a 31-1 vote, the bill advanced to final reading by voice vote.