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GOP Senators Split on Whether to Cut Medicaid By $10 Billion

  • August 26th, 2005

Republican members of the Senate Finance Committee appear headed for a fight over whether to trim the growth of Medicare in order to spare the Medicaid program from drastic cuts. Congress's fiscal year 2006 budget resolution calls for cutting Medicaid by $10 billion over the next five years, but the resolution left open where the reductions should be made. Among the proposals is to tighten restrictions on the ability of the elderly to qualify for Medicaid coverage of nursing home care by transferring assets. The Finance Committee must submit a final proposal by September 16.

Committee Chair Chuck Grassley (R-Iowa) favors a proposal that would reduce Medicaid spending only, while Sens. Olympia Snowe (R-Maine) and Gordon Smith (R-Ore.) "have been working on ways to reduce the Medicaid cuts," such as finding ways to trim Medicare spending, according to CQ Today.

Demetrios Karoutsos, a spokesperson for Sen. Smith, said, "We certainly think there is room to reduce Medicare," adding, "Smith's goal throughout this entire process is to find ways that don't impact beneficiaries." A spokesperson for Sen. Snowe, Antonia Ferrier, said, "Taking $10 billion from Medicaid would be a wrong-headed approach. There are a lot of other things that we are open to exploring. That could very well be savings from Medicare as well."

AARP is urging lawmakers not to slash $10 billion from Medicaid, arguing that seniors will have more difficulty qualifying for nursing home care if the funds are cut. The organization suggests that savings can be realized through more efficient prescription drug spending by Medicaid.

In a letter to Congress, AARP and close to 40 other members of the Leadership Council of Aging Organizations (LCAO) opposed the proposals to further restrict the ability of the elderly to transfer assets, stating in part that the proposals "will create unacceptable new obstacles to nursing home admission for vulnerable, frail elderly and disabled persons'¦" Other signatories to the letter included the National Senior Citizens Law Center, Families USA, the National Academy of Elder Law Attorneys, the AFL-CIO, AARP, and the National Citizens Coalition for Nursing Home Reform.

New Hampshire Seeks to Restrict Transfers on Its Own

While Congress considers changing the asset transfer rules for the entire country, New Hampshire will soon be asking the federal Centers for Medicare and Medicaid Services for permission to impose on its residents the same restrictions. The New Hampshire Medicaid agency's proposal, among other things, increases the "lookback" period for all transfers from 36 months to 60 months and begins the Medicaid penalty period on the date on which an applicant applies for coverage or meets all eligibility requirements, whichever is later. (Currently, the penalty period begins on the first day of the month of the transfer.)

To review the New Hampshire draft waiver request, go to: http://www.dhhs.nh.gov/DHHS/OCOM/GraniteCare/HB691-waiver-assets.htm

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Last Modified: 08/26/2005

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