On February 8, 2006, President Bush signed into law the Deficit Reduction Act of 2005 (“DRA”). This new law makes profound changes in the rules affecting eligibility for Medicaid. As a result, individuals who want to hold onto at least some savings or property need to plan sooner and plan better than ever before.
In general, the Medicaid eligibility rules are designed to prevent individuals from accessing Medicaid benefits until they have exhausted their own funds. In recent years, Elder Law attorneys developed a variety of strategies and solutions for individuals to conserve assets by transferring them to family members or trusts, in order to put these individuals in a position to qualify for Medicaid benefits.
When President Bush signed the DRA into law, he stated that “The bill tightens the loopholes that allowed people to game the system by transferring assets to their children so they can qualify for Medicaid benefits.”
Medicaid Planning is Your Right
Whether to engage in Medicaid planning is, of course, a personal one, and not everyone shares the view that people are “gaming the system.” Nobody is obligated to pay more taxes than he owes, or is criticized for tax planning to minimize taxes. Similarly, individuals should not be criticized for Medicaid planning and arranging their affairs so as to be eligible for benefits that will protect them and their family.
As the New York Court of Appeals has stated, “no agency of the government has any right to complain about the fact that middle class people confronted with desperate circumstances choose voluntarily to inflict poverty upon themselves when it is the government itself which has established the rule that poverty is a prerequisite to the receipt of assistance in the defraying of the costs of ruinously expensive, but absolutely essential, medical treatment.”
For those who want to consider Medicaid planning, the Deficit Reduction Act of 2005 ("DRA") makes a number of major changes. Click here to read more about those major changes to the DRA, i.e., look-back period, home equity and "penalty period". Or contact the lawyers at Lamson & Cutner in Manhattan to schedule a confidential consultation to discuss your options for Medicaid Benefits planning, strategies and solutions. Call Toll Free 866-524-1818 to schedule an appointment.
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