Attorney Mark A. Roseman,as a member of the Florida Academy of Elder Law Attorneys, Serves Senior Citizens on Issues Involving Medicaid Planning and Asset Preservation

MEDICAID ALERT, February 2006 Major changes to federal Medicaid laws and two controversial new rules will cripple middle class Americans.

(PRWEB) February 17, 2006 -- In the first major change to federal Medicaid laws since 1993, Congress wielded a mighty ax in the Deficit Reduction Act of 2005, chopping portions of the national program down. Two controversial new rules is applicable now that President Bush has signed the bill, which together will cripple middle class Americans who suffer from chronic conditions such as Alzheimer’s, Parkinson’s, MS, stroke, dementia, brain injury or simply old age.

It required Vice President Cheney to fly home from the Middle East to cast the tie-breaking vote in the U.S. Senate, with a 51-50 majority dramatically changing the way people gain access to Medicaid. The new law will:

1. INCREASE THE LOOK BACK PERIOD TO 60 MONTHS FOR ALL TRANSFERS
    Under the old law, there is a two tiered look-back period. For transfers to or from certain trusts the look-back period is 60 months. For all other transfers, the look-back period is 36 months. The new law creates a single look-back period of 60 months for all transfers.

2. CHANGE THE DATE THE PENALTY PERIOD BEGINS TO RUN (The deepest cut of all)
     Under old law, the date of commencement of the penalty period in Florida is the first day of the month following the month in which an asset transfer was made. Under the new rule, the penalty period would commence on the later of: (1) the month following the month in which the transfer is made (existing law) or (2) the date on which an individual is both receiving institutional level of care (i.e., in a nursing home or receiving care at home) and whose application for Medicaid benefits would be approved but for the imposition of a penalty period at that time. That means to even start the penalty period running, the individual must have $2,000 or less at the time he receives institutional level care, and he must have applied for assistance.

3. HOMESTEADS WITH EQUITY ABOVE $500,000 WOULD RENDER AN APPLICANT INELIGIBLE
        This provision would not apply if a spouse or child under 21 or child who is blind or disabled, reside in the home. States are given the authority to increase the home equity amount to up to $750,000. Homeowners could reduce their equity through a reverse mortgage or home equity loan.

4. IN ADDITION, THERE WOULD BE CHANGES IN OTHER AREAS:

ANNUITIES
Annuities would have to name the State as a remainder beneficiary, and balloon payment annuities would be a countable asset.

INCOME FIRST RULE
The “Income First” Rule would be mandatory.

ROUNDING DOWN OF PENALTY PERIOD
No rounding down of penalty periods. Medicaid would impose penalty periods of a partial month for transfers of smaller amounts.

AGGREGATION OF MULTIPLE TRANSFERS
Multiple transfers in more than one month would be aggregated.

NOTES AND LOANS
Notes and Loans would have to be actuarially sound, with no balloon payment and no self-canceling upon the death of the lender.

LIFE ESTATES
The purchase of a life estate, if an applicant does not reside in the home for at least one year after purchase, would be considered a transfer of assets.

CONTINUING CARE RETIREMENT COMMUNITIES
Continuing Care Retirement Communities could force spending of assets that were disclosed on application before applying for Medicaid, and certain deposits would be countable toward Medicaid eligibility’

LONG-TERM CARE PARTNERSHIP INSURANCE POLICIES
Long-Term Care Insurance Partnership policies would be expanded from the four States that currently offer it.

The Medicaid and Asset Protection Law Firm Of Mark A. Roseman has studied the new legislation, and is formulating strategies to employ for our clients under the new rules.

ANYONE CONTEMPLATING ASSET PROTECTION PLANNING, CALL US AT
(954)923 – 2864 or (305)326 – 7400 TO ARRANGE A CONSULTATION.

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