Study: Few Medicaid applicants transferred assets

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A government study has found that few nursing home residents transferred assets before they applied for Medicaid coverage in nursing homes. The findings come amid uncertainty over the extent to which residents transfer assets to become eligible for Medicaid coverage.

The Government Accountability Office study analyzed data from 540 Medicaid nursing home application files from three states. Only about 10% of approved applicants in three states transferred assets for less than the fair market value. Only two of the applicants experienced a delay in Medicaid eligibility because the penalties had expired by the time they applied for coverage.

It is still not clear to what extent the Deficit Reduction Act of 2005's long-term care provisions will affect applicants' eligibility for Medicaid, the study said. The act increases the "look-back" period from three to five years when determining whether beneficiaries made inappropriate transfers of assets.