The Message of the Pending Asset Transfer Changes: Don't Delay Planning

When families gather together for the holidays, it's an ideal time to sit down and discuss important issues like long-term care planning. This holiday season such discussions are taking on a special urgency because of the profound changes to the Medicaid rules that are looming. The bottom line: if you have been hesitating about seeing an attorney about long-term care planning, hesitate no longer.

As you may know, Congress is on the brink of enacting a law that would impose punitive new restrictions on the ability of the elderly to transfer assets before qualifying for Medicaid coverage of nursing home care. Among other provisions, the proposed new law would extend Medicaid's "lookback" period for all asset transfers from three to five years and make those with valuable houses ineligible for Medicaid long-term care coverage. But the most significant change is that it would also shift the start of the penalty period for transferred assets from the date of transfer, as is the case now, to the date when the individual would qualify for Medicaid coverage of nursing home care if not for the transfer. In other words, the penalty period would not begin until the nursing home resident was out of funds, meaning there would be no money to pay the nursing home for however long the penalty period lasts. Innocent gifts to grandchildren could, years later, result in extended periods without any long-term care coverage of any kind. What does this mean for you? If you have considered protecting some assets for your loved ones in case you later require long-term care, you should contact a qualified elder law attorney now. Until the new proposals become law -- which according to our best estimate will be on January 4, 2006 -- the current rules apply. Transfers made before the law is enacted will not be subject to the new penalty period rules and other new provisions.

These provisions, along with others in the bill that cut programs for the poor and elderly for the first time in a decade, will be enacted only if the House of Representatives votes for them a second time. The House narrowly passed the bill the first time around in the early hours of the morning with some members not present and with only four hours to review a complex, 774-page package of provisions. Many representatives may not have realized what they were voting for. People who are concerned about the impact of this bill, S. 1932, on them or their loved ones may want to make their concerns known to their congressional representative. For contact information for your congressperson, go to: http://www.visi.com/juan/congress/

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