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House GOP Leaders Fail to Muster Majority for Bill Containing Medicaid Transfer Changes

  • November 11th, 2005

Facing a revolt among Republican moderates, House GOP leaders pulled their budget-cutting bill containing $9.5 billion in Medicaid cuts off the House floor on Thursday rather than put it to a vote.

The bill, the House version of fiscal year 2006 budget reconciliation legislation, would impose harsh new restrictions on the ability of the elderly to transfer assets before qualifying for Medicaid coverage of nursing home care. The asset-transfer changes are reportedly among the provisions that may be adjusted as the House leadership scrambles to forge a compromise that could win the support of both moderate and conservative party members.

The bill's withdrawal signals that GOP leaders could not muster the 218 votes needed to pass the budget measure. Republicans said they would try again after the Veterans Day weekend to find a bare majority for more than $50 billion in spending cuts and policy changes.

On Nov. 3, the House Energy and Commerce Committee approved the budget reconciliation package that includes restrictions on asset transfer rules. It would extend the "lookback" period for all 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 of Medicaid application. It also would make anyone with more than $500,000 in home equity ineligible for Medicaid-funded long-term care. The Senate's version of the budget bill does not include these provisions.

In an effort to win passage of the bill on the House floor, Republicans dropped a controversial provision that would allow oil drilling in the Arctic National Wildlife Refuge, but even this failed to win enough votes for the bill's approval.

Reps. Sherwood Boehlert (R-N.Y.), Michael Castle (R-Del.) and Vernon Ehlers (R-Mich.) said they want some of the Medicaid cuts to be removed from the bill. According to CongressDaily, the House leadership was discussing Medicaid with Republican moderates, focusing on provisions that would tighten restrictions on asset transfers and increase copayments for Medicaid recipients.

Stunning Reversal

The vote cancellation was a stunning reversal for a Republican majority that heretofore has maintained iron discipline among its members. But that was before President Bush's plummeting poll numbers, last Tuesday's election results, and the electorate's growing discomfort with Republican budget priorities.

"The fractures were always there. The difference was the White House was always able to hold them in line because of perceived power," Tony Fabrizio, a Republican pollster, told the Washington Post. "After Tuesday's election, it's 'Why are we following these guys? They're taking us off the cliff.' "

Opponents of the Medicaid asset transfer changes have a formidable ally in AARP. In a statement, AARP said it could not support the House bill because of the asset transfer provisions. These provisions, the senior advocacy group said, would penalize people who have simply helped family members or given to charity.

"We agree that steps should be taken to close real loopholes that allow people to improperly qualify for Medicaid," AARP said. "However, the extended look-back period and the change in the penalty date would deny coverage to those eligible for Medicaid at precisely the time they need assistance and have no remaining assets, leaving them no other way to pay for needed long-term care."

AARP also said that the provision denying Medicaid nursing home coverage to those with substantial home equity will force the elderly "to either take an expensive reverse mortgage or sell the home in order to get long term care coverage."

Meanwhile, the Congressional Budget Office estimates that the provisions in the House bill changing the treatment of asset transfers and home equity would reduce Medicaid outlays by about $2.5 billion over the next five years. In its report on the bill's budgetary impact, the CBO notes that under the current law, "very few of the applicants for Medicaid incur penalties for prohibited asset transfers."

Even if House Republicans are able to pass the budget cuts, the bill could be doomed by the determination of some House and Senate Republicans to add drilling for oil in the Arctic to any final bill. Some GOP moderates have said they will oppose any bill that permits Arctic drilling.

For an article in the Chicago Tribune on the politics of the House reconciliation measure, click here

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Last Modified: 11/11/2005

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