Paul L. Caron

Wednesday, December 21, 2005

New Law Toughens Medicaid Eligibility

The deficit reduction bill passed 51-50 by the Senate today (with Vice-President Dick Cheney casting the deciding) toughens the rules on the impact of asset transfers on Medicaid eligibility.  Today's Wall Street Journal catalogs these changes:

[The new law] make[s] it harder for some people who do have assets to get Medicaid to pay their nursing-home bills. The changes:

• Force people who transfer assets to wait awhile before Medicaid will cover their nursing-home care.

• Bar a person with equity in a home of more than $500,000 from Medicaid coverage. States can raise the limit to $750,000. Currently, in most cases, a person can own a home of any value and still have their nursing-home bills covered.

• Require states to look for inappropriate asset transfers during the five years before a Medicaid application, instead of the current three years.

• Classify certain annuities as assets that trigger the waiting period; annuities sometimes are used to turn large assets into small, Medicaid-friendly payouts.

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