Secretary of Health & Human Services Kathleen Sebelius (Blade file photo by Michael Key)

The Obama administration is set on Friday to issue policy guidance to states expanding their ability to offer same-sex couples the same protections afforded to straight couples when they receive long-term care under Medicaid, the Washington Blade has learned exclusively.

Under the new guidance, dated June 10, states have the option to allow healthy partners in a same-sex relationship to keep their homes while their partners are receiving support for long-term care under Medicaid, such as care in a nursing home.

Medicaid kicks in for a beneficiary to receive care after an individual depletes virtually all of their money. To pay for the beneficiary’s expenses under Medicaid, a state could impose a lein, or take possession, of a beneficiary’s home to pay for Medicaid expenses.

However, federal law prohibits imposing this lein if beneficiaries are married to someone of the opposite-sex who’s still living in their home. The new guidance, signed by Deputy Administrator of the Centers for Medicare & Medicaid Services Cindy Mann, clarifies that states can offer this protection to the healthy partner of a Medicaid recipient in a same-sex relationship.

“A State can have a policy or rule not to pursue liens when the same-sex spouse or domestic partner of the Medicaid beneficiary continues to lawfully reside in the home,” the guidance states.

The Obama administration previously hadn’t articulated whether gay couples could receive these protections under the Defense of Marriage Act, which prohibits federal recognition of same-sex marriage. The guidance doesn’t mandate that same-sex couples receive this protection, but allows states to “incorporate their criteria for determining when to impose a lien in the Medicaid State plan.”

The Department of Health & Human Services had been examining ways to offer more protections to same-sex couples under Medicaid as part of the work it has undertaken for LGBT people, but until now hadn’t issued the policy guidance to states.

Secretary of Health & Human Services Kathleen Sebelius said in a statement the new guidance represents a path for low-income same-sex couples to receive care under Medicaid.

“Low-income same-sex couples are too often denied equal treatment and the protections offered to other families in their greatest times of need,” she said. “That is now changing. Today’s guidance represents another important step toward ensuring the rights and dignity of every American are respected by their government.”

Michael Cole-Schwartz, a Human Rights Campaign spokesperson, praised the Obama administration for issuing the guidance, but maintained same-sex couples won’t have equal protection under the law until DOMA is repealed.

“No one should have to choose between keeping their home and getting the medical care they need and deserve,” Cole-Schwartz said. “This is an important step to give some couples the security and dignity they deserve when they need it most. However all same-sex couples will remain vulnerable until we end discrimination in marriage and repeal the Defense of Marriage Act.”

In addition to allowing states not to impose liens on the homes of same-sex couples, the guidance also allows individuals in same-sex relationships to sell their home below market value to their partner and still receive Medicaid support.

An individual seeking Medicaid coverage may want to make this transfer to deplete his or her assets more quickly to be eligible for care. Under other circumstances, the state could impose a period of ineligibility on the beneficiary because of this sale, but the guidance says states can ignore this transfer if they believe such ineligibility would institute “undue hardship.”

“Because of the flexibility afforded to States in determining undue hardship, we believe that States may adopt criteria, or even presumptions, that recognize that imposing transfer of assets penalties on the basis of the transfer of ownership interests in a shared home to a same-sex spouse or domestic partner would constitute undue hardship,” the guidance states.

Furthermore, the guidance says states can opt not to seize the home of Medicaid beneficiaries upon their death if their same-sex partner is still living in the home.

States may seize the property of Medicaid beneficiaries upon their death — if a lien has been imposed on the home or the recipient is age 55 or over and has received nursing services — but not if the recipient’s child or spouse is living in the home. The guidance clarifies that states may also decide not to do so if a same-sex partner is living in the home.

“States have flexibility to design reasonable criteria for determining what constitutes an undue hardship and who may be afforded protection from estate recovery in such instances,” the guidance states. “At the State’s discretion, this may include establishing reasonable protections applicable to the same-sex spouse or domestic partner of a deceased Medicaid recipient.”