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The DRA One Year Later: Dems Waiting for Outcome of Legal Challenges to Law That Stiffens Medicaid Transfer Penalties

Feb. 8, 2007 -- One year after President Bush signed the Deficit Reduction Act of 2005 (DRA) into law on February 8, 2006, the new Democratic Congress has put aside the question of whether the law was legally enacted, and instead is waiting for the outcome of six constitutional challenges that are proceeding in the federal courts.

It is widely acknowledged that the bill signed into law by the President never passed the U.S. House of Representatives due to a clerical error. The Constitution requires that a bill must pass both houses of Congress and be signed by the President in identical forms to become law.

When the bill was signed last February, congressional Democrats said that the measure was not a law within the meaning of the Constitution and called for it to be brought before Congress for another vote. In February 2006, Rep. Henry Waxman (D-CA), then the ranking minority member of the House Committee on Government Reform, wrote a strongly worded letter to House minority leader Nancy Pelosi (D-CA) calling for a revote of the DRA. But with support for the DRA fading fast even among its own members, the Republican leadership ignored such requests, calling the matter "a technical problem."

Now that control of Congress has shifted, however, the Democratic leadership is unwilling to act. A spokesperson for Rep. Waxman, who is now chairman of the Committee on Government Reform, told ElderLawAnswers that the House Democratic leadership will wait for the legal challenges to work their way through the federal courts.

So far, federal district courts have rejected five challenges to the DRA's legitimacy, including ones by Public Citizen and by Rep. John Conyers (D-MI) and ten other members of the House of Representatives.

While these cases remain on appeal to federal circuit courts, a sixth challenge brought by ElderLawAnswers member attorney Jim Zeigler in federal district court for the Southern District of Alabama is still pending. (See Elder Law Attorney Sues Over New 'Law' Affecting Medicaid Transfers" .) Zeigler says his suit has “a better chance of succeeding than the others” because of support from an unexpected source.

As previously reported by ElderLawAnswers, the clerk of the House of Representatives produced a study in May 2006 that appears to prove that the DRA never passed the House.

According to the clerk's document, a discrepancy between the House and Senate versions of the DRA apparently emerged when the Senate enacted a version of the bill allowing Medicare to pay beneficiaries for oxygen care for 13 months, but the House passed a version allowing for a 36-month payment -- an estimated $2 billion difference. A Senate clerk later discovered the error and changed the language to what the Senate originally approved. The Speaker of the House and President Pro Tem of the Senate then certified the bill as passed and sent it to the President for his signature, in apparent violation of the constitutional requirement that before a bill can be enacted into law by the President, it must pass both the House and Senate in identical form.

“The clerk's honest and thorough document is a confession that the bill never passed the House and an admission of all the allegations in my case,” Zeigler said.

After discovering the clerk's document, Zeigler filed it in federal court alleging that it is an admission of the allegations in his complaint.

“The House clerk proved my case for me," Zeigler went on. "One version of the bill passed the Senate and a different version passed the House. The President signed the Senate version on February 8, 2006. It is being treated as the law of the land, but it has never passed the House. This is constitutional law 101. Eighth-graders in civics class learn that the same bill must pass both houses and be signed by the President or it is not a law.”

Zeigler's case is awaiting a decision by U.S. District Judge Ginny Grenade on a motion to dismiss filed by the U.S. Department of Justice.

Zeigler says that the bill, as written, will have real consequences for the elderly. When a nursing home resident drops below $2,000 in savings and could qualify for Medicaid coverage, a period of Medicaid ineligibility is then assessed based on any transfers that took place in the past five years. There is no source of funds to pay for nursing home care while the Medicaid applicant waits out the penalty period.

“Families are going to be shocked when their older one is ineligible for nursing home coverage because four years and eleven months ago she helped out grandchildren with college tuition, or helped relatives in a financial jam, or faithfully tithed to her church, or gave to hurricane relief," Zeigler said.

Zeigler has characterized the DRA as the 'Put Granny on the Street' Law.

For a copy of Zeigler's notice to the federal court and the document package of the House Clerk, go to: www.jimzeigler.com and scroll down to "Litigation Updates."