House
Approves Bill Substantially Changing Asset Transfer Rules
Last Updated: 11/21/2005
Topic: Medicaid
By the narrowest of margins, the House has voted to approve a budget plan that cuts about $12 billion from Medicaid, including imposing harsh new restrictions on the ability of the elderly to transfer assets before qualifying for Medicaid coverage of nursing home care.
The Deficit Reduction Act of 2005 (HR 4241) was approved by a 217 to 215 vote in the early hours of Friday, November 18. The bill maintains provisions aimed at making it even more difficult for the middle-class elderly to receive long-term care coverage. The measure would extend Medicaid's "lookback" period for all asset transfers from three to five years and change the start of the penalty period for transferred assets from the date of transfer to the date of Medicaid application. The bill also would make any individual with home equity above a certain limit ineligible for Medicaid nursing home care, although in a concession to Republican moderates that limit was raised from $500,000 to $750,000. The final measure retains a provision imposing co-payment increases on Medicaid beneficiaries with incomes above the federal poverty level.
The bill now must be reconciled in conference committee with a Senate budget bill that makes only modest changes in the asset transfer rules. (For an ElderLawAnswers article explaining the effects on America's elderly of the two competing proposals, click here.)
Last week, Republican leaders were forced to pull the bill from the floor because of a lack of support. In the final vote, after some of the bill's cuts had been softened, 14 House Republicans and all House Democrats opposed the bill. (For a tally of votes on the bill, click here.) The Center on Budget and Policy Priorities estimates that the eleventh-hour changes only eased the cuts aimed at the poor by 2 percent from the original version.
The House bill would also:
Codify the income-first rule.
Establish new rules for the treatment of annuities, including a requirement that the state be named as the remainder beneficiary.
Require Medicaid applicants to provide "full information . . . concerning any transaction involving the transfer or disposal of assets during the previous period of 60 months, if the transaction exceeded $100,000, without regard to whether the transfer or disposal was for fair market value."
Allow Continuing Care Retirement Communities (CCRCs) to require residents to spend down their declared resources before applying for medical assistance. Set forth rules under which an individual's CCRC entrance fee is considered an available resource. Extend long-term care partnership programs to any state.
The Associated Press predicts that the upcoming conference committee negotiations with the Senate will be "arduous." The negotiations, writes the Los Angeles Times, "are likely to test [President] Bush's ability to work his will in Congress when his approval ratings are at an all-time low." The conference committee has not yet been named and no timetable for its deliberations has been set.
The final version of HR 4241 is still unavailable. For a version of the bill that does not reflect last-minute changes (such as the shift from $500,000 to $750,000 in home equity), click here. Scroll down to Title III, Chapter 2 for the asset transfer rule changes. Meanwhile, a survey for the National Academy of Social Insurance finds that 7 in 10 Americans age 40 and over think the federal government should do more to help people meet the cost of long-term care.
Last Updated: 11/21/2005
Topic: Medicaid
By the narrowest of margins, the House has voted to approve a budget plan that cuts about $12 billion from Medicaid, including imposing harsh new restrictions on the ability of the elderly to transfer assets before qualifying for Medicaid coverage of nursing home care.
The Deficit Reduction Act of 2005 (HR 4241) was approved by a 217 to 215 vote in the early hours of Friday, November 18. The bill maintains provisions aimed at making it even more difficult for the middle-class elderly to receive long-term care coverage. The measure would extend Medicaid's "lookback" period for all asset transfers from three to five years and change the start of the penalty period for transferred assets from the date of transfer to the date of Medicaid application. The bill also would make any individual with home equity above a certain limit ineligible for Medicaid nursing home care, although in a concession to Republican moderates that limit was raised from $500,000 to $750,000. The final measure retains a provision imposing co-payment increases on Medicaid beneficiaries with incomes above the federal poverty level.
The bill now must be reconciled in conference committee with a Senate budget bill that makes only modest changes in the asset transfer rules. (For an ElderLawAnswers article explaining the effects on America's elderly of the two competing proposals, click here.)
Last week, Republican leaders were forced to pull the bill from the floor because of a lack of support. In the final vote, after some of the bill's cuts had been softened, 14 House Republicans and all House Democrats opposed the bill. (For a tally of votes on the bill, click here.) The Center on Budget and Policy Priorities estimates that the eleventh-hour changes only eased the cuts aimed at the poor by 2 percent from the original version.
The House bill would also:
Codify the income-first rule.
Establish new rules for the treatment of annuities, including a requirement that the state be named as the remainder beneficiary.
Require Medicaid applicants to provide "full information . . . concerning any transaction involving the transfer or disposal of assets during the previous period of 60 months, if the transaction exceeded $100,000, without regard to whether the transfer or disposal was for fair market value."
Allow Continuing Care Retirement Communities (CCRCs) to require residents to spend down their declared resources before applying for medical assistance. Set forth rules under which an individual's CCRC entrance fee is considered an available resource. Extend long-term care partnership programs to any state.
The Associated Press predicts that the upcoming conference committee negotiations with the Senate will be "arduous." The negotiations, writes the Los Angeles Times, "are likely to test [President] Bush's ability to work his will in Congress when his approval ratings are at an all-time low." The conference committee has not yet been named and no timetable for its deliberations has been set.
The final version of HR 4241 is still unavailable. For a version of the bill that does not reflect last-minute changes (such as the shift from $500,000 to $750,000 in home equity), click here. Scroll down to Title III, Chapter 2 for the asset transfer rule changes. Meanwhile, a survey for the National Academy of Social Insurance finds that 7 in 10 Americans age 40 and over think the federal government should do more to help people meet the cost of long-term care.
