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POTENTIAL CHANGES IN ELDER LAW

POTENTIAL CHANGES IN ELDER LAW

Unless swift action is taken, Congress and the President are about to enact The
Budget Reconciliation Act reducing the federal deficit by $39.7 billion. One way they
will reduce the deficit is by cutting back on federal entitlement and welfare programs.
Pharmacies and the managed care industry are protected. Medicaid and Medicare
beneficiaries pay the price. If this law passes, Medicaid qualification will become more
difficult, Part B Premiums for Medicare will rise, and low-income Medicaid recipients
may be denied care entirely.
The more egregious provisions for those seeking Medicaid benefits include the
following:
1. The
penalty period
for transfers will effectively begin on the date you apply for
Medicaid, and not, as under current law, on the date the transfer was actually made. If
Grandma gave her granddaughter $5,000 to help with college in 2005, and must apply for
Medicaid on January 1, 2010, Medicaid will treat the $5,000 gift as having been made on
January 1, 2010, and Grandma will not be able to qualify for Medicaid benefits until the
penalty period expires. Under current law, the $5,000 gift would not be considered and
Grandma would qualify for Medicaid immediately.
2. A
church supporter
who has given money to church as part of their regular
expenses will be ineligible for Medicaid benefits for some period.
3. Currently the
look back period
, which is the period of time that Medicaid
considers in determining whether transfers by the applicant were for fair market
value, is three years (for transfers not in trust). Under the pending act, the look
back period, whether the transfer is in trust or not, will be five years. Poor record-
keeping and a failure to anticipate that you may need Medicaid in five years can
prevent you from receiving Medicaid benefits for some period if you make gifts to
children or charities.
4. No Medicaid benefits will be available to an individual who has
$500,000 in
equity in their home,
regardless of their income. This is particularly onerous for
No representation is made that the quality of the legal services to be
performed is greater than the quality of legal services performed by other lawyers.” ARPC 7.2(e)
applicants who may have a home that has appreciated substantially over many
years, although income has declined.
The law does provide some relief by requiring states to provide
hardship waivers
.
This “relief,” however, would apply only if the individual would be deprived of
either medical care such that the individual’s health or life would be endangered,
or of food, clothing, shelter, or other necessities of life. It also includes a timely
process to make this determination, but permits a state to provide for payments for
nursing facility services to hold the bed for the individual at the facility for a
maximum of 30 days.
The treatment of
Annuities
is also revised by the law, so that the state must
effectively be named as the remainder beneficiary after the spouse, or as the
primary beneficiary, if there is no spouse.
Finally, the act expands the state
Long-Term Care Partnership Program
to all
states. Currently 4 states (not including Alabama) have partnership programs that
qualify under the new law that disregards any assets in an amount equal to the
insurance benefit payments made to or for an individual who is a beneficiary
under a long-term care insurance policy (LTCI) if the following requirements are
met:
1. The LTCI covers a resident of the state at the time coverage first becomes
effective;
2. The LTCI meets the IRS requirements for a qualified long term care policy;
3. The LTCI meets certain requirements approved by the state’s insurance
commissioner;
4. The LTCI provides for compound annual inflation protection for certain
individuals;
5. The State Medicaid Agency must provide information and assistance to the
insurance department to assure that individuals who sell such policies receive
training and demonstrate an understanding of such policies;
6. The insurer provides regular reports to the government; and
7. The state does not impose requirements on these policies that it does not
impose on all long term care policies.
If you object to these provisions, please contact your member of Congress quickly.
Anne R. Moses

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