Coming Medicaid Changes Will Dramatically Affect Seniors Faced with Nursing Home Costs

In previous issues I have addressed the dilemma of paying for nursing home costs.  Well, the ability to qualify for Medicaid to pay for those costs is about to become much more burdensome on the average middle-class senior due to Illinois’ long awaited implementation of federally imposed Medicaid changes that date back to 2006.

President Bush signed the Deficit Reduction Act in February 2006 to change the eligibility criteria for Medicaid benefits to pay for nursing home charges.  Illinois, after five years, has published its proposed rules implementing these changes.  On April 12, 2011, the Illinois General Assembly’s Joint Committee on Administrative Rules (JCAR) held its hearing to discuss approval, denial, or modification of these proposed rule changes.

Many senior advocacy groups and the Illinois State Bar Association have voiced strong objections to the rule changes being proposed.  Some of the most dramatic changes, many of which go beyond what even the 2006 federal law mandated, are:

• Look back period is 60 months before a person becomes institutionalized and applies for Medicaid.
• If a transfer of assets occurs within the 60 month look back period, the penalty period for a transfer of assets is 60 months and begins with date of transfer or date the person becomes institutionalized and applies for Medicaid, whichever is later. This could mean up to 10 years of disqualification from Medicaid.
• Gifts for birthdays, holidays, or to charity could be considered a transfer of an asset trigging a penalty period.
• A spouse can no longer disinherit a spouse that is in the nursing home so that assets are preserved in the event the spouse living at home dies first.
• All transfers of assets beginning February 8, 2006 have these rules retroactively applied (unless the Medicaid application has already been submitted and approved before new rules were issued).

These draconian measures will likely harm the average senior’s ability to save what little they have from a lifetime’s worth of work.  The rules, as they are written, only allow the wealthier senior, who can afford to completely private pay for their costs of nursing home care for five full years to plan to protect assets.

If you wish to voice your concerns over these rules, you should call the Joint Committee’s offices or your state representative/senator.

In this uncertain time, be sure to speak with a knowledgeable elder law attorney before taking any action to protect your assets.  Doing the wrong thing could be costly.