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Originally Released April
12, 2005
On April 7th
Attorney Marshall was on the faculty of a briefing held for AARP
national staff at AARP headquarters in Washington. As part of the Administration's budget proposal, President Bush
has proposed that Congress "strengthen" current Medicaid asset
transfer rules in order to discourage parents from gifting assets to
their children. Attorney
Marshall was one of ten nationally known elder law attorneys who were
invited to brief AARP policy staff about Medicaid asset transfers so
that the organization can more effectively lobby Congress on the
issue.
Seniors make
lifetime gifts to children for many reasons.
Sometimes the goals do include protecting the gifted asset from
loss due to health care costs. As a requirement of federal law, States
may be required to withhold Medicaid payment for a period of time if
an individual has given away assets. Under current law, the waiting
period begins to run on the date the gift is made.
The
Administration's stated purpose in requesting changes to the asset
transfer rules is to force parents to retain all of their assets so
that they can later be spent on long term care costs. To achieve this
goal, the Administration has suggested that Congress legislate a
change to the start date of the penalty that is applied when assets
are transferred.
The Bush
Administration's proposal is that Congress extend the look back
period on gifts to 5 years and move the start date of the penalty
period from the month in which the transfer is made, to the month in
which the beneficiary otherwise qualifies for Medicaid.
All of the elder law attorneys present at the briefing agreed
that moving the start date in this fashion could have disastrous
effects on
America's long-term care delivery system.
(See Attorney Marshall's Editorial above for further
information on the likely effects of this rule change).
The attorneys at
the briefing were in agreement that the Congressional stereotype that
Medicaid qualification planning involves millionaires who are
"gaming" the system is ill-informed.
Statistical data compiled by Marshall, Parker & Associates' along
with a survey conducted by the National Academy of Elder Law Attorneys
demonstrate that the vast majority of people who seek legal assistance
to qualify for Medicaid are seniors who are married, over age 75, and
of very modest means. The typical net worth of a client and spouse
seeking assistance with Medicaid qualification, including the equity
in their home, is under $300,000.
Congress is
currently deciding whether to approve Medicaid budget cuts.
If Medicaid cuts are approved, it will then consider
implementation of the penalty start date change requested by the
President.
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