New Medicaid Rules Challenge Seniors

New Medical Rules Present Serious Challenges For Seniors amount of the asset transfer Second, the penalty The Deficit Reduction Act was by $3300 (the average period for such transfers signed into law Feb. 8 with lots of fanmonthly cost of a Florida now starts on the date one fare—but the law has few fans among nursing home, and an unremiddle class seniors. Because of the applies for benefits, not alistically low figure). Thus, draconian cuts in Medicaid benefits on the date the gift is Mr. Doe will not be eligible for long-term care, seniors are going made, thereby creating to receive benefits for 10 to find it harder than ever to protect even more financial permonths ($33,000 divided by their nest eggs from the ravages of il for families. The fol$3300), or not until January nursing home costs. While it may take lowing example illus2008. With no way to pay months for Florida to figure out just trates: Let’s say in March the nursing home, the burhow to implement the federal law, cer2006, John Doe gives his Joseph S. Karp, den is going to fall on Mr. tain key provisions are already in efson $33,000 to help him C.E.L.A. Doe’s family members, who fect. Those provisions may dramatipurchase a home. In are going to have to come up a way cally affect you and your family. March 2007, Mr. Doe suffers a severe to deal with this financial dilemma. First, for all transfers made after stroke and enters a nursing home; with Third, the applicant’s home is no Feb. 8, 2006, the lookback period is no more assets to his name at that time, longer considered an exempt asset for increased to five he applies for Medicaid. the purpose of Medicaid eligibility. years. Thus, any as- ...for all transfers made Because Mr. Doe transOnly $500,000 in equity is exempt; set transfer made after Feb. 8, 2006, the ferred assets within the any excess equity counts as an asset within five years lookback period is in- lookback period, he is from the point of view of asset spendineligible to receive benprior to the date an creased to five years. down. An exception is made if the efits for a penalty periindividual applies spouse, or a child who is under 21 or od that begins running the date of apfor Medicaid, will disqualify the apdisabled, lives in the home. States have plication. In Florida, the penalty peplicant from receiving benefits for a the option of raising the exemption riod is determined by dividing the certain penalty period.

to $750,000, but Florida has yet to make a decision about this. If you want to protect your hardearned assets from nursing home costs and pass as much as possible to your spouse and kids, techniques still exist that can help you. However, it is now far more difficult and more complicated to do so, and planning must begin much sooner. In Florida, the only attorney considered expert in this painstaking and highly technical area is a certified elder law attorney. So don’t delay—see a certified elder law attorney for up-to-date advice. Joseph S. Karp is a nationally certified and Florida Bar-certified elder law attorney (C.E.L.A.) specializing in the practice of Trusts, Estates and Elder Law. His offices are located at 2500 Quantum Lakes Drive, Boynton Beach; 2875 PGA Blvd., Palm Beach Gardens; and 1100 SW St. Lucie W. Blvd., Port St. Lucie. Call him at 561-752-4550 (Boynton); 561-625-1100 (Palm Beach Gardens); or 772-343-8411 (Port St. Lucie). Toll-free from anywhere: 800-893-9911. E-mail: KLF@ Karplaw.com. or website www.karplaw.com