FEDERAL LEGISLATION IMPACTS MEDICAID ELIGIBILITY
On February 2, 2006, by a slim majority, the United States Congress passed Senate Bill 1932 which, among other things, changed many of the eligibility rules for Medicaid qualification. These changes are an attempt to restrict qualification for Medicaid to only the poorest of citizens rather than to provide continued assistance to the middle class. Unfortunately, this ill conceived legislation will prevent many people from qualifying for Medicaid.
For example, if a person donates money to charity or helps with his/her grandchildren’s college tuition within 5 years of nursing home admission, a penalty will be imposed beginning on the date of nursing home admission, rather than at the time the gift was actually made. Also, the old 3 year look back period has now been extended to 5 years on all types of transfers.
Another provision in the new law forces a person who purchases an annuity for his/her support to name the state as the beneficiary should they apply for Medicaid upon nursing home admission. Upon Medicaid re-certification, newly purchased annuities will be checked to make sure the state has been named the beneficiary.
Even a person’s home is not protected under the new law. If the equity in a person’s home exceeds $500,000 or $750,000 if the state adopts the higher amount, Medicaid qualification will be denied unless the money is borrowed out of the home in order to reduce the equity below the above limit. Ultimately a person could lose his or her home if in a skilled nursing facility and can not make the mortgage payments.
There are other provisions in the new law which are just as devastating to the middle class.
Without some government safety net for long term care, those who do not have sufficient resources, who can not qualify or afford long term care insurance, will go bankrupt. Skilled Nursing Facilities may also go bankrupt when so many people who apply for Medicaid are denied benefits under the new law.
Although the new law restricts Medicaid planning, there are still opportunities to assist people who do not have long term care insurance, and who are at risk of becoming bankrupt. Please feel free to contact our office for more information and/or arrange for an “In Service” at your facility.