Beware of Medicaid Provisions in BRA

Via Kaiser First Edition:

A recent article in the South Florida Sun-Sentinel examined legislation in the 2006 budget reconciliation bill (S 1932)that would tighten restrictions on the ability of individuals totransfer assets to qualify for Medicaid coverage of nursing home care.The reconciliation bill has been approved by the Senate and awaits afinal vote in the House (Lade, South Florida Sun-Sentinel,1/19). The bill would impose stricter rules on U.S. residents seekingto transfer assets, such as homes, to children or others to meetincome-eligibility requirements for Medicaid (Kaiser Daily Health Policy Report,12/21/05). Under the new rules, the so-called “lookback” period into anindividual’s most recent asset transfer would be extended from threeyears to five years. The bill also would modify the rules governing thewaiting period for when an individual can reapply for Medicaid. Undercurrent law, the waiting period begins at the time the asset transferwas made; under the new rules, it would begin when the initial Medicaidapplication was made. In addition, the bill would disqualify anyonewith at least $500,000 in home equity from applying for Medicaid.Supporters of the legislation say the new rules would prevent seniorswho could afford to pay for nursing home care from sheltering assets tomeet Medicaid income requirements. Opponents say the changes will havea negative impact on middle-income seniors who cannot afford to pay fornursing home care. Alice Retire Feld, president of the Academy of Florida Elder Law Attorneys,said, “It’s incredibly punitive. What I see coming is that seniors willbe forced to give away their money when they’re young because they haveno other choice” .

Ed:  The House is scheduled to vote on this budget bill on Feb. 1.  If you have concerns, contact your representative.  And note that this bill won’t reduce the deficit due to tax cuts afforded the nation’s wealthiest individuals via a different piece of legislation.