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Serving Philadelphia, Delaware County, Montgomery County, Bucks County and Chester County since 1996.
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Issue 1, March 2007
FEATURE ARTICLE - New Medicaid Regulations Mean Big Changes |
HEALTHLINE - Aging and Your Eyes |
LIFE CARE PLANNING - What is an Elder Care Coordinator |
CAREGIVER HELPLINE - Resources for Caregivers |
ONE FAMILY'S STORY - Meet Joseph Buonadonna
New Medicaid Regulations Mean Big Changes
The Deficit Reduction Act of 2005 (DRA), which became law on February 8, 2006, makes major changes to the Medicaid laws. As Pennsylvania is about to issue regulations to comply with the DRA, many Pennsylvania residents and nursing homes are about to feel the effects of this new legislation. The DRA makes the following changes to Medicaid:
- The look-back period on any asset transfers (i.e. gifts) will be lengthened from three years to five years.
- When funds are gifted, the start of the penalty period for those transfers will be changed from the date of the gift,
as it is under current law, to the date people would otherwise qualify for Medicaid, that is, when
they are in a nursing
home and have spent down the rest of their assets.
- There will be new hardship waiver rules.
- The use and treatment of annuities will be changed.
- Individuals with home equity greater than $500,000 will be ineligible for Medicaid.
- There will be changes relating to life estates, promissory notes, loans and entrance fees for continuing care retirement communities.
As with any major legislative initiative, we will not know all of the ramifications of these changes for several months. However, it is clear that the Medicaid gifting rules have changed so the look-back period for all asset transfers made after February 8, 2006 is five years. Also, the start of the penalty period will be pushed forward to the date that the
individual is in the nursing home and spent down to $2,400.
For example, under the previous law, if a Pennsylvania resident made a gift of $60,000 in Janaury, 2006 (prior to exactment of DRA), he or she could be eligible for Medicaid in September, 2006 because the penalty period would have started in January 2006, the month the gift was made, and ended in
August, 2006. Under the new law, if a Pennsylvania resident makes a $60,000 gift after February 8, 2006, the penalty period will not start until he or she is in a nursing home and spent down to $2,400. Therefore, the new law could result in a situation where any gifted funds may have to be given back to pay for nursing home care.
You can imagine the nightmares
this may cause for unsuspecting nursing home residents and their families. What will happen if the nursing home resident made a gift to a charity or to help pay for a grandchild's education? They will not be able to get the gifts back. When Medicaid denies their claim, how will the nursing home get paid? The bottom line is that the new law greatly complicates
the Medicaid eligibility rules, application process and Asset Protection Planning. Individuals may find that gifts from the heart may prevent them from qualifying for medicaid when they need it.
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Call Us: (610) 446-9626
Fax Us: (610) 446-9985 |
Visit our offices:
17 Mifflin Ave. Suite 202
Havertown, PA 19083 |
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