Law Office of John S. Palmer Attorney at Law

(425) 455-5513

Medicaid Update

Posted Thursday, December 6, 2012 by John S. Palmer

The rule permitting a Medicaid applicant to transfer his or her home to an adult child who has provided care to the parent was recently changed to require proof that the care was needed.

Gifting property within 5 years of applying for Medicaid will generally result in a period of ineligibility. The length of the ineligibility period depends on the total fair market value of all assets gifted during the 5 year “look back” period. There are certain exceptions to this rule, however. For example, the transfer of an asset for less than fair market value to a spouse is not penalized, although the Federal Defense of Marriage Act currently prohibits the applicability of this exception to legally married same-sex couples.

On November 22nd, DSHS amended the rule permitting the transfer of a Medicaid client’s home to a child who has “lived in the home for at least two years immediately before the client’s current period of institutional status and provided care that enabled the individual to remain in the home.”

The rule now only permits the transfer of the home to a child who provided “verified” care, and “a physician’s statement of needed care is required.” This rule is change is obviously aimed at making sure that the transfer of a home to a caregiver-child is only permitted in circumstances where the care was truly needed to keep the parent from being institutionalized, and will generally require families to plan ahead by proactively seeking the physician’s statement now required by the rule.

Meanwhile, a bill was introduced in Congress this past summer that would, among other things, call for a study of the ramifications of lengthening the 5-year look-back period to 10 years. The bill, House Resolution 6300, also known as the Medicaid Long-Term Care Reform Act of 2012, was introduced in August by Louisiana Rep. Charles Boustany Jr. It has been given a 2% chance of passage by and is opposed by the National Academy of Elder Law Attorneys (NAELA), which has posted a summary of the bill here.

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Law Office of John S. Palmer11911 NE 1st St, Ste. B204,Bellevue, WA 98005-3056