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Proposed Medicaid Transfer Changes Will Hurt Elderly, ELA Member Tells Senate Committee
- July 21st, 2005
Testifiying before the United States Senate Special Committee on Aging July 20, New York ElderLawAnswers member attorney Vincent J. Russo explained that proposals to make Medicaid asset transfer penalties more punitive will "harm tens of thousands of older Americans who have worked all of their lives, paid taxes and have never been on public assistance."
Senate and House committees have been holding hearings on ways to reduce the cost of the Medicaid program. A strategy favored by the Bush administration and many of the nation's governors is to make it more difficult for the elderly to transfer assets in order to qualify for Medicaid coverage of nursing home care, even though studies have shown that such transfers are not a significant contributor to Medicaid costs.
Under current law, Medicaid penalizes applicants whose assets or gifts are transferred during a set window of time prior to their application for benefits. Under the proposed changes, this penalty window gets much stiffer, and will make it impossible for many to become eligible for Medicaid, placing seniors in medical and financial jeopardy, said Russo, who was speaking on behalf of the National Academy of Elder Law Attorneys.
One proposal to make transfer penalties harsher calls for changing the start of any penalty period from the date of transfer to the date one applies for Medicaid. A second proposal would increase the "lookback period" '“ how far back a state Medicaid agency may look for transfers -- to five years. Taken together, Russo said, these rule changes "will punish unwitting elders who have helped their families with commonly made gifts and then experience medical events such as a stroke, hip fracture or Alzheimer's disease."
During the testimony, Russo, who is past president of the National Academy of Elder Law Attorneys, shared several representative profiles of clients who will be denied Medicaid if the proposed changes go through: the grandparent who helps pay for a grandchild's education; the devoted church supporter who donates personal assets to the church; the widow who lacks records of her now-deceased husband's spending; and the caring sister who uses savings to help a needy sister remain in her home.
As an alternative to these proposals, Russo offered six less draconian eligibility changes aimed at curbing abusive Medicaid planning.
"[C]losing loopholes," Russo said, "is a better solution than creating punitive and unworkable penalties for our seniors, who have contributed so much to our nation and now face chronic illness and the need for long-term care services."
For more on Medicaid's asset transfer rules, click here.
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