Recent Legislative Updates

Deficit Reduction Act of 2005

Despite intense lobbying efforts on behalf of senior advocates by AARP, the National Academy of Elder Law Attorney as well as the Nursing Home Industry, budget legislation has been passed and signed into effect by President Bush that will greatly impact seniors and their families who need long term care. Eligibility rules to receive Medicaid Benefits in a nursing home have changed dramatically. The legislation includes the following changes:

• Extends Medicaid’s “lookback” (penalty) period for all asset transfers from three to five years.
• Changes the start of the "penalty period" for transferred assets from the date of transfer to the date when the individual transferring the assets enters a nursing home.
• Individuals with greater that $500,000 in home equity are ineligible for Medicaid.
• Establishes new rules for the treatment of annuities, including a requirement that the state be named as the remainder beneficiary.
• The purchase of a life estate will be included in the definition of "assets" unless the purchaser resides in the home for at least one year after the date of purchase.
• Allows Continuing Care Retirement Communities (CCRCs) to require residents to spend down their declared resources before applying for Medicaid, and entrance fees to be considered an available resource.

Elder Law Attorneys have been working for years to sort through the impact these changes continue to have on families as well as on the elder care industry, and are working together to make sure that people have access to benefits. Based on these evolving changes, it is now more important than ever to start planning for long term care needs with a qualified Elder Law Attorney.