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Q: What is the Deficit Reduction Act?
The Deficit Reduction Act of 2005 was signed into law by President George W. Bush in 2006. The goal of the Act was to make it more difficult for individuals who would otherwise qualify for Medicaid preserve their assets. Specifically, the Act extended Medicaid’s “look-back” period for all asset transfers to five years and began the penalty period for transferred assets to the date the person enters a nursing home and would otherwise be eligible to obtain Medicaid benefits. Simply put, the penalty period would not begin until the person is residing in a nursing home without funds (effectively, no longer able to afford nursing home care). The Act also made individuals with a home equity of over $500,000 ineligible for Medicaid nursing home care. An experienced elder law attorney can advise you about how these and the many other significant provisions of the Deficit Reduction Act of 2005 might affect you, based on your unique circumstances.