Changes to Medicaid Law under the Deficit Reduction Act
In November 2008, the Deficit Reduction Act (“the Act”) was put into practice in the State of Florida through Florida’s Department of Children and Families. The Act effectively made it more difficult for people to qualify for Medicaid benefits by removing a variety of asset protection provisions and changing the look-back period and penalty start date. This article is intended to provide a brief overview on these changes.
Change in Penalty Period for Gifts
Previously, the penalty period began running when a gift was made. The Act changed the date so that the penalty period begins running on the date the Medicaid application is filed. Thus, the number of months a person stays ineligible to receive Medicaid benefits due to his or her making gifts usually starts running when the person is in a facility and has otherwise qualified.
Extension of Medicaid’s “look-back” period
Previously, the look-back period was three years for asset transfers to individuals and five years for asset transfers to revocable trusts. As of January 1, 2010, the look-back period for gifts is five years. It is no longer advisable to make gifts of any kind. If you already have made gifts, Rooth Law Group may be able to assist you so that you can still qualify for Medicaid.
Homestead Changes
Previously, homesteads were always an exempt asset in the Medicaid qualification analysis. After the Act, individuals with a home equity of over $500,000 were deemed ineligible for Medicaid nursing home care. Please check with Rooth Law Group for assistance in qualifying if the equity in your home is over $500,000.
Changes regarding Annuities
Previously, immediate annuities were generally not considered an asset for the purpose of Medicaid eligibility planning and as a result, an applicant could invest money into those annuity contracts without affecting his or her Medicaid eligibility. The Act still permits immediate annuities to function as an investment tool for Medicaid planning purposes but requires that the State is named as a remainder or secondary beneficiary under the annuity. Contact Rooth Law group prior to purchasing any annuity if you anticipate the need for long-term care.
These changes regarding Medicaid eligibility under the Deficit Reduction Act listed here are merely a brief summary. Please contact the elder law attorneys at Rooth Law Group to learn any additional changes relevant to you and to determine whether and how any of amendments to Medicaid law affect your unique circumstances.
