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A Medicaid professional consultant helping an elderly woman to protect her assets and money from the nursing home spend down.

Medicaid Transfer Penalty

What is the penalty period for Medicaid transfers?

On February 1, 2006 Congress passed the Deficit Reduction Act of 2005 ("DRA 2005"), which included the most sweeping overhaul to Medicaid laws ever. The last change to the Medicaid laws occurred in 1993 with the Omnibus Reconciliation Act ("OBRA 93"). The changes in the law have one main objective: to recover as much as possible from the elderly and infirmed who require Medicaid assistance and make it as difficult as possible to transfer assets without triggering a disqualification. Under the new laws, it will be very possible to see elderly institutionalized persons in a position where they have no assets to pay for nursing home care and cannot qualify for Federal or State Medicaid assistance at the same time. For these unfortunate people, there will be nowhere to go. President Bush signed DRA 2005 into law on February 8, 2006, but a typographical error calls into question its legality. It is widely anticipated the error will be corrected and the law will become effective.
The new Medicaid law as passed:
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