Senate Approves Punitive Transfer Rules As Cheney Breaks Tie

Vice President Dick Cheney cast the deciding vote in the Senate to pass budget legislation cutting the federal deficit by $39.7. Among other provisions in a bill that cuts back federal entitlement programs for the first time in a decade, the legislation would impose punitive new restrictions on the ability of the elderly to transfer assets before qualifying for Medicaid coverage of nursing home care.

However, because Democrats succeeded in forcing minor changes to the bill before the vote, the House must vote again on the measure after having passed it earlier in the week by a 212-206 margin. The timing is in doubt, but the House is not expected to vote on the legislation until it reconvenes January 31, 2006.

Lawrence Davidow, president of the National Academy of Elder Law Attorneys, said there is "some credible hope that we and our colleagues may have some time to push back on Members of the House of Representatives." Davidow noted that because of the last-second nature of the earlier House vote, some House members did not vote and those who did had only four hours to review a complex package of provisions. "The more they learn," Davidow said, "the more concerns members will understandably have."

Davidow called on his colleagues to "continue to call, e-mail, and meet with our Members of the House to try to secure the necessary votes to defeat this budget reconciliation bill when the House returns."

The legislation, passed by a 51-50 vote, would extend Medicaid's "lookback" period for all asset transfers from three to five years and change the start of the penalty period for transferred assets from the date of transfer to the date when the individual transferring the assets enters a nursing home and would otherwise be eligible for Medicaid coverage. In other words, the penalty period does not begin until the nursing home resident is out of funds, meaning she cannot afford to pay the nursing home. The bill also would make any individual with home equity above $500,000 ineligible for Medicaid nursing home care, although states may raise this threshold as high as $750,000.

The legislation also would:

• Establish new rules for the treatment of annuities, including a requirement that the state be named as the remainder beneficiary.
• Allow Continuing Care Retirement Communities (CCRCs) to require residents to spend down their declared resources before applying for medical assistance.
• Set forth rules under which an individual's CCRC entrance fee is considered an available resource.
• Require all states to apply the so-called “income-first” rule to community spouses who appeal for an increased resource allowance based on their need for more funds invested to meet their minimum income requirements.
• Extend long-term care partnership programs to any state.