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The Deficit Reduction Act passed
by President Bush on February 8, 2006 makes it difficult for
seniors to qualify for Medicaid under certain circumstances.
Medicaid is the joint federal state program that pays for
individuals’ room and board and pharmaceuticals while they are
in a nursing home if they meet the financial criteria.
Under the old law, if one gave away assets, then he had to wait
a period of time before Medicaid would pay for that individual’s
stay in a nursing home based on a certain formula – the amount
of dollars of the gift, for instance $100,000 divided by a daily
rate for the nursing home. So if one had a penalty of 15 months
under the old law, then that penalty would start to run when the
gift was made, hypothetically back in December 2005 and that
penalty would then have expired as of the end of February 2006.
Thus if all the individual’s other resources met the financial
criteria for Medicaid as of March 1, 2006, then he would be
eligible for Medicaid as of that date.
However, if the gift was made after the new act passed on
February 8, 2006, then the penalty period would not start to run
until the person was already in the nursing home and his assets
were low enough to qualify for Medicaid. Presumably, at that
point he would not have assets left to pay the nursing home at
private pay rates of $220 or $250 per day for 15 months. So the
nursing home would turn to the children at that point to pay the
bill. In the event that the children refuse to do so, there is
an old law under which the nursing home can bring suit against
the children for payment for the parents’ debt to the nursing
home under the concept of filial responsibility. Such problems
could befall an individual who makes a gift to a child or
grandchild regardless of the purpose.
This new law will also adversely impact the spouses of residents
in nursing homes. This new law fails to make provisions for low
income spouses of nursing home residents. They are denied the
ability to keep sufficient resources to keep them out of
poverty. Our seniors face a crisis in nursing home care. Our
government must find an affordable way to care for them without
forcing them into poverty and denying them of their dignity.
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