Bush signs 2006 budget reconciliation bill into law

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As expected, President Bush this week signed the fiscal year 2006 budget reconciliation bill. The legislation calls for $6.4 billion in cuts over five years for Medicare and $4.8 billion for Medicaid.

The law contains measures that make it harder for seniors to qualify for Medicaid to receive nursing home care. It extends the look back period for transferring assets to five years from three, changes the start of the penalty period for illegally transferring assets, and makes seniors with home equity of more than $500,000 ineligible for nursing home benefits.

The law, also known as the Deficit Reduction Act, includes an exceptions policy for therapy caps. Such a policy would allow some seniors to receive therapy above and beyond the caps. The limits, which went into effect in January, place a $1,740 ceiling on speech and physical therapy and a $1,740 ceiling on occupational therapy.

The House narrowly passed the legislation last week after the Senate voted it through late last year.