Last Updated: 1/13/2006
Topic: Medicaid

House Speaker Dennis Hastert (R-Ill.) has tentatively scheduled a re-vote on the 2006 budget reconciliation bill (S 1932) for February 1, the day after the House reconvenes following its winter recess. Moderate Republicans are feeling mounting pressure from groups like AARP to change their votes.

Among other provisions in a bill that cuts back federal entitlement programs for the first time in a decade, the legislation would impose punitive new restrictions on the ability of the elderly to transfer assets before qualifying for Medicaid coverage of nursing home care. (Click here to read these provisions.)

The Senate passed the bill before Christmas, with Vice President Dick Cheney casting the tie-breaking vote. However, procedural moves by Senate Democrats require the House to vote on the bill a second time after having passed it by a 212-206 margin at the end of an all-night session.

Although House Republicans "expect to narrowly approve the bill again, boosted by President Bush's State of the Union speech the night before," according to CongressDaily, groups opposed to the bill's cuts are working hard to convince moderate Republicans to vote against it. Brian Riedl, a budget analyst for the Heritage Foundation, says, "[N]othing is guaranteed over a six-week break."

Leading the fight against the bill is AARP, which strongly opposes the transfer restrictions and has vowed to make lawmakers who vote for them pay a political price. "This budget represents bad policy and AARP will now work to explain the full impact of this vote to its more than 36 million members," said AARP's CEO William D. Novelli.

Joining AARP is a temporary umbrella group, the Emergency Campaign for America's Priorities (ECAP). Spokesperson Brad Woodhouse said, "If they win, and we're not convinced they will, we want to spill blood in the process so that they are gun-shy about turning around and doing this again in the next budget." ECAP has targeted some moderate Republicans at local vigils and is organizing phone blitzes in advance of the vote.

"Clearly, moderate Republicans in the House were reluctant to vote in favor of these drastic changes to Medicaid," reports theNational Senior Citizens Law Center (NSCLC). According to NSCLC, several Republicans who did not vote against the bill the first time around delivered a letter in December to the congressional leadership expressing objections to the scope of the Medicaid cuts.

Meanwhile, in his weekly radio address Saturday, January 7, President Bush said Congress should "finish its work" and pass the budget bill. Bush said that passage would show that the "people's representatives can be good stewards of the people's money." Bush also urged Congress to make all his tax cuts permanent. In an opinion piece in the San Jose Mercury, Sen. Barbara Boxer (D-CA) said that House Republicans should "scrap this poor excuse for a budget" and "instead cancel some of the tax cuts for millionaires," which "would accomplish the same thing -- deficit reduction -- but without harming our kids, our elderly and the middle class."

Last Updated: 12/12/2005

The National Governors Association, whose membership includes both Republican and Democratic governors, sent a letter to Congress on Monday mostly endorsing the House's budget reconciliation package that contains changes to Medicaid transfer rules. The endorsement of the House bill by Democratic governors is a split with Democratic members of Congress. Every Democratic member of Congress voted against the bill when it passed by a slim 217 to 215 vote in November.

Among other things, the House bill includes a measure that would extend Medicaid's "lookback" period for all asset transfers from three to five years and change the start of the penalty period for transferred assets from the date of transfer to the date of Medicaid application. In addition, the House version allows states to increase co-payment increases on Medicaid beneficiaries with incomes above the federal poverty level. The House version differs from the Senate budget bill, which makes only modest changes in the asset transfer rules and doesn't include an increase in co-payments. The two bills now have to be hashed out in a joint House-Senate conference committee.

The NGA's letter specifically approved of the changes to transfer penalties in the House bill, saying the final bill should "include critical House provisions that would increase the look-back period and begin the penalty period at the time of application for services." The letter also endorsed the co-payments provision and a provision in the house bill making any individual with home equity above $750,000 ineligible for Medicaid nursing home care.

For the full letter, click here. An article in the Dec. 12, 2005, New York Times reports that "Medicaid is a flash point" as House and Senate conferees sit down to reconcile the two budget bills. The article focuses on provisions in the House bill that would allow states, for the first time, to deny care or services because of a person's inability to pay premiums or co-payments.

Last Updated: 1/11/2006

Topic: Medicaid

Facing a revolt among Republican moderates, House GOP leaders pulled their budget-cutting bill containing $9.5 billion in Medicaid cuts off the House floor on Thursday rather than put it to a vote.

The bill, the House version of fiscal year 2006 budget reconciliation legislation, would impose harsh new restrictions on the ability of the elderly to transfer assets before qualifying for Medicaid coverage of nursing home care. The asset-transfer changes are reportedly among the provisions that may be adjusted as the House leadership scrambles to forge a compromise that could win the support of both moderate and conservative party members.

The bill's withdrawal signals that GOP leaders could not muster the 218 votes needed to pass the budget measure. Republicans said they would try again after the Veterans Day weekend to find a bare majority for more than $50 billion in spending cuts and policy changes.

On Nov. 3, the House Energy and Commerce Committee approved the budget reconciliation package that includes restrictions on asset transfer rules. It would extend the "lookback" period for all transfers from three to five years and change the start of the penalty period for transferred assets from the date of transfer to the date of Medicaid application. It also would make anyone with more than $500,000 in home equity ineligible for Medicaid-funded long-term care. TheSenate's version of the budget bill does not include these provisions.

In an effort to win passage of the bill on the House floor, Republicans dropped a controversial provision that would allow oil drilling in the Arctic National Wildlife Refuge, but even this failed to win enough votes for the bill's approval.

Reps. Sherwood Boehlert (R-N.Y.), Michael Castle (R-Del.) and Vernon Ehlers (R-Mich.) said they want some of the Medicaid cuts to be removed from the bill. According to CongressDaily, the House leadership was discussing Medicaid with Republican moderates, focusing on provisions that would tighten restrictions on asset transfers and increase copayments for Medicaid recipients.

Stunning Reversal The vote cancellation was a stunning reversal for a Republican majority that heretofore has maintained iron discipline among its members. But that was before President Bush's plummeting poll numbers, last Tuesday's election results, and the electorate's growing discomfort with Republican budget priorities.

"The fractures were always there. The difference was the White House was always able to hold them in line because of perceived power," Tony Fabrizio, a Republican pollster, told theWashington Post. "After Tuesday's election, it's 'Why are we following these guys? They're taking us off the cliff.' "

Opponents of the Medicaid asset transfer changes have a formidable ally in AARP. In a statement, AARP said it could not support the House bill because of the asset transfer provisions. These provisions, the senior advocacy group said, would penalize people who have simply helped family members or given to charity.

"We agree that steps should be taken to close real loopholes that allow people to improperly qualify for Medicaid," AARP said. "However, the extended look-back period and the change in the penalty date would deny coverage to those eligible for Medicaid at precisely the time they need assistance and have no remaining assets, leaving them no other way to pay for needed long-term care."

AARP also said that the provision denying Medicaid nursing home coverage to those with substantial home equity will force the elderly "to either take an expensive reverse mortgage or sell the home in order to get long term care coverage."

Meanwhile, the Congressional Budget Office estimates that the provisions in the House bill changing the treatment of asset transfers and home equity would reduce Medicaid outlays by about $2.5 billion over the next five years. In its report on the bill's budgetary impact, the CBO notes that under the current law, "very few of the applicants for Medicaid incur penalties for prohibited asset transfers."

Even if House Republicans are able to pass the budget cuts, the bill could be doomed by the determination of some House and Senate Republicans to add drilling for oil in the Arctic to any final bill. Some GOP moderates have said they will oppose any bill that permits Arctic drilling.
For an article in the Chicago Tribune on the politics of the House reconciliation measure, click here

Last Updated: 1/09/2006

Agreeing with earlier results, a study by the Kaiser Commission on Medicaid and the Uninsured finds that asset transfers by individuals entering nursing homes are relatively small.
The study found that 9.2 percent of Medicaid recipients entering a nursing home had transferred assets within two years of admission. The mean amount transferred was $5,380 and the median was $1,400. Researchers also discovered that 18.7 percent of Medicaid nursing home patients had transferred assets more than two years before they entered a facility. The mean amount transferred by this group was $8,202 and the median was $3,000.

The study also found that Medicaid nursing home residents had minimal assets before entering the nursing home. For example, half of unmarried residents had less than $4,000 of non-housing assets before entering nursing homes as Medicaid patients.

The study confirmed the findings of earlier studies on the impact of asset transfers. The Government Accountability Office (GAO)released a study in October that reported the level of assets being transferred by the elderly were relatively insignificant. The Georgetown University Long-Term Care Financing Projectreached a similar conclusion in May.

These studies indicate that changes to asset transfer rules proposed by the Medicaid Commission may not save much money. The commission, which was established to advise Congress on how to cut $10 billion from Medicaid, proposed rules that would extend the "lookback" period for all transfers from three to five years and change the start of the penalty period for transferred assets from the date of transfer to the date of Medicaid application. These changes in the law have been incorporated into the House version of the 2006 budget bill.

The Kaiser study on asset transfers is part of a group of studies on Medicaid released by the Kaiser Commission. Other studies look at the distribution of assets in the elderly population and strategies for keeping individuals out of nursing homes, among other topics. For a full list of all the reports, click here.