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THE UNITED STATES SENATE HAS VOTED TO AMEND THE EXISTING MEDICAID RULES REGARDING ASSET TRANSFERS

I. NEW MEDICAID LEGISLATION PENDING

The United States Senate has voted to amend the existing Medicaid rules regaurding asset transfers. Due to differences in the House and Senate versions of the bill, the legislation will have to go back to the House for another vote. The enactment of this new law is, however, likely and is anticipated to occur as early as the end of this month. The proposed new law would have a profound effect on the ability of people to protect their assets from the exorbitant costs of a long-term illness or disability.

Under current law, Medicaid generally will not consider asset transfers made more than three years (five years in the case of trusts) prior to the submission of an application for Medicaid institutional benefits. Despite the length of the look back period, we have frequently been able to eliminate or reduce any period of ineligibility through proper planning. Once the new law is enacted, many of these planning techniques are expected to no longer be available. The new law is expected to provide, among other things, that the look back period will be five years for all transfers and that the penalty period will only start to run on the later of (1) the month following the month in which an asset transfer is made (the current law) or (2) the date on which an individual is both receiving institutional care (i.e., in a nursing home or receiving care at home under the Lombardi Program) and whose application for Medicaid benefits would be approved but for the imposition of a penalty period at that time. These changes would significantly delay Medicaid eligibility for most people.

Accordingly, those persons considering completing or updating a plan to protect their assets from the exorbitant costs of long-term care, should consider moving forward with the planning process as soon as possible. If planning is completed prior to the enactment of the new legislation, the currently effective Medicaid asset transfer rules are expected to apply. For those engaging in planning after the effective date of the new legislation, the new, significantly more restrictive Medicaid eligibility is expected to apply.

Although the new law is expected to pass, there is a slight possibility that it will not. Please contact our office for a sample letter that individuals can send to their Congressional representative requesting that they do not allow this new legislation to pass.

II. OFFICE OF MEDICAID MANAGEMENT ANNOUNCES 2006 INCOME AND RESOURCE LEVELS

Pursuant to GIS 05 MA/045, effective January 1, 2006, Medicaid eligibility must be determined using the following updated figures:

III. OFFICE OF MEDICAID MANAGEMENT ANNOUNCES REGIONAL RATES FOR CALCULATING TRANSFER PENALTY PERIODS FOR 2006

Pursuant to GIS 06 MA/001, effective January 1, 2006, the Medicaid regional rates used to determine a transfer of assets penalty in connection with Medicaid institutional benefits are as follows:

Robert J. Kurre & Associates, P.C., offers legal services in the areas of Elder Law, Estate Planning and Estate Administration. This publication does not constitute the rendering of legal advice or other professional services by Robert J. Kurre & Associates, P.C. While extreme care is taken to present the material in an accurate fashion, Robert J. Kurre & Associates, P.C. disclaims any implied or actual warranties as to the accuracy of the material and any liability with respect thereto.