Medicaid is the government's program that assists an individual in paying for long-term care, such as a nursing home or assisted living facility, when the individual lacks the resources to pay for his or her care. The Medicaid rules are often confused with Medicare, which does not pay for long-term care. The Medicaid regulations drastically changed with the enactment of the Deficit Reduction Act of 2005.
MEDICAID FACTS BEFORE AND AFTER THE
DEFICIT REDUCTION ACT OF 2005
MEDICAID CHANGES AFTER
THE DEFICIT REDUCTION ACT OF 2006
1. Imposition of a five year look back period from the date of a Medicaid application applies to all transfers. There is no longer a distinction between a transfer in trust or an outright transfer to an individual.
2. The penalty period begins to run from the date when the donor would “otherwise have qualified for benefits,” if not for the gift.
3. Gifts over the look back period are cumulative.
4. Penalty periods are not rounded down to the lower number of months and a fractional penalty period is applied for gifts less than the applicable divisor amount.
5. For unmarried individuals, the primary residence is not counted as an asset, as long as the individual continues to live in the home and his or her equity in the home does not exceed $500,000 (or up to $750,000 if allowed by the State).