[Congressional Record Volume 142, Number 131 (Friday, September 20, 1996)]
[Senate]
[Pages S11090-S11092]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. GRASSLEY (for himself and Mr. GRAHAM):
  S. 2099. A bill to amend title XIX of the Social Security Act to 
provide post-eligibility treatment of certain payments received under a 
Department of Veterans Affairs pension or compensation program, and for 
other purposes; to the Committee on Finance.


                     Veterans Benefits Legislation

  Mr. GRASSLEY. Mr. President, on behalf of myself and Senator Graham, 
I am introducing today legislation which, when enacted, will modify the 
treatment of certain veterans benefits received by veterans who reside 
in State veterans homes and whose care and treatment is paid for by the 
Medicaid Program.
  Veterans residing in State veterans homes, who are eligible for aid 
and attendance [AA] and unusual medical expense [UME] benefits, 
veterans benefits provided under Title 38 of the United States Code, 
who are also eligible for Medicaid, are the only veterans in nursing 
homes who receive, and who are able to keep, the entire AA and UME 
benefit amounts. This can be as much as $1,000 per month.
  Other veterans, who reside in other types of nursing homes are 
receiving Medicaid, and who are also eligible for AA/UME can receive 
only $90 per month from the VA.
  Yet other veterans, who reside in State veterans homes but who are 
not eligible for the AA/UME benefits must contribute all but $90 of 
their income to the cost of their care.
  So, even though veterans residing in State veterans homes who are 
eligible for AA and UME benefits and who qualify for Medicaid have all 
of their treatment and living expenses paid by the State Medicaid 
Program, they nevertheless may keep as much as $1,000 per month of the 
AA and UME benefits.
  It might be useful for me to review how this state of affairs came to 
be.
  In 1990, legislation was enacted (PL 101-508, November 5, 1990) which 
modified title 38, the veterans benefits title of the United States 
Code, to stipulate that veterans with no dependents, on title XIX, 
residing in nursing homes, and eligible for aid and attendance and 
unusual medical expenses, could receive only a $90 per month personal 
expense allowance from the VA, rather than the full UME and AA amounts.
  State veterans homes were subsequently exempted from the definition 
of nursing homes which had been contained in those earlier provisions 
of PL 101-508 by legislation enacted in 1991--PL 102-40, May 7, 1991.
  The result was that veterans on title XIX and residing in State 
veterans homes continued to receive UME and AA. Until recently, the 
State veterans homes followed a policy of requiring that all but $90 
per month of these allowances be used to defray the cost of care in the 
home.
  Then, a series of Federal Court decisions held that neither UME nor 
AA could be considered income. The court decisions appeared to focus on 
the definition of income used in pre- and post-eligibility income 
determinations for Medicaid. The court decisions essentially held that 
UME and AA payments to veterans did not constitute income for the 
purposes of post-eligibility income determinations. The reasoning was 
that, since these monies typically were used by veterans to defray the 
cost of certain services they were receiving, the payments constituted 
a ``wash'' for purposes of income gain by the veterans.
  However, the frame of reference for the courts' decisions was not a 
nursing home environment in which a veteran receiving Medicaid benefits 
might find himself or herself. In other words, the UME and AA payment 
received by a veteran on Medicaid are provided to a veteran for 
services for which the State is already paying through the Medicaid 
program. The veteran is not paying for these services with their own 
income. So, as a consequence of the court decisions, these payments to 
the veteran in State Veterans Homes represent a net gain in income to 
the veteran; they are not paid out by the veteran to defray the cost of 
services the veteran is receiving.
  As I mentioned earlier, VA does not pay AA or UME to veterans who are 
also on title XIX and residing in non-State Veterans Home nursing 
homes. Those veterans get only a $90 per month personal allowance.
  And non-Medicaid eligible veterans who reside in State Veterans Homes

[[Page S11092]]

must pay for services with their own funds. If they get UME and AA 
payments, the State Veterans Home will take all but $90 of those sums 
to help defray the cost of the nursing home care.
  Although the written record does not document this, I believe that 
the purpose for exempting State Veterans Homes was to allow the Homes 
to continue to collect all but $90 of the UME and AA paid to the 
eligible veteran so as to enable State Veterans Homes to provide 
service to more veterans than they otherwise would be able to provide.
  In any case, it seems highly unlikely that the purpose of exempting 
State Veterans Homes would have been to allow these veterans, and only 
these among similarly situated veterans, to retain the entire UME and 
A&A amounts.
  The legislation I am introducing today modifies Section 1902 (r)(1) 
of the Social Security Act to stipulate that, for purposes of the post-
eligibility treatment of income of individuals who are 
institutionalized--and on Title 19--the payments received under a 
Department of Veterans Affairs pension or compensation program, 
including Aid and Attendance and Unusual Medical Expense payments, may 
be taken into account.
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