Review of Recent Changes to Medicaid


If you believe Medicaid will cover your long-term care needs, you may be interested to learn how Medicaid was impacted by passage of the Deficit Reduction Act (DRA), signed by President Bush in February of this year.

While the basic income ($1,809 per month for 2006) and savings (about $2,000 in assets excluding a residence) allowances for applicants remain the same, there are some important changes.

Prior to enacting the DRA, the value of the home of an applicant was not considered. Now, if an applicant’s home is worth more than $500,000 (or $750,000 in some states), the application is rejected. (The home value is not taken in to account if it is occupied by the applicant’s spouse or dependent child.)

Additionally, before the DRA, an applicant’s finances were reviewed for three years to determine how long the state would deny Medicaid coverage. Now the so-called "look back period" has been extended to five years. Previously, the penalty clock started at the time a gift was made, however, now it begins when the application for Medicaid is filed.

On the brighter side, the DRA allows increased protection of assets for those applicants who purchased qualifying long-term care policies, and it also improves coverage for at-home care services.

Source: US News & World Report, 11-19-06

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