Report: Asset transfer rules may not cut Medicaid costs

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Results from a pair of new studies by the Kaiser Family Foundation throw cold water on the notion that asset-transfer restrictions brought by the Deficit Reduction Act of 2005 will ease the burden on the Medicaid program.

The act, signed into law in February, increases the look-back period for asset transfers from three years to five.
A "vast majority" of people do not transfer assets to qualify for Medicaid, according to "Frontline Perspectives on Long-Term Care Financing Decisions and Medicaid Assets Transfer Practices." Kaiser researchers interviewed benefits counselors in six states to reach their conclusions.
"The findings of this study," the report concludes, "suggest that the role of Medicaid as the primary payer of long-term care services will continue to grow."
Medicaid nursing home residents who transferred assets within two years of their admission date (9.2%) transferred an average amount of $5,380.
Each of the amounts is worth no more than one or two months of nursing home care, investigators pointed out.
The other Kaiser report, "Private Long-Term Care Insurance: A Viable Option for Low and Middle-Income Seniors?" found that a long-term care policy is not affordable for most older people. For more, see www.kff.org.

Asset transfer patterns
(Medicaid nursing home users, admitted 1995-2004)

Percent with Transferred Amount
Timing Transfer Median Mean
Admission period 9.2% $1,400 $5,380
2 years earlier 18.7% $3,000 $8,202
4 years earlier 13.1% $3,200 $5,139
Source: Urban Institute and Kaiser Commission on Medicaid and the Uninsured, 2005