Charles A. Lanford, Jr.
One of the key issues in the Law of the Elderly involves Estate Planning strategy which considers eligibility for Medicaid assistance. Eligibility depends on the size of the Estate, and may involve the transfer of property to adult children or other donees in amounts usually not exceeding the $10,000.00 per donee. Usually, no penalty would occur if application for Medicaid assistance was made 3 years or more after the transfer. If less than 3 years, the applicant would incur a penalty, whereby Medicaid assistance would not begin for a period of time depending on the amount of the conveyance and other factors.
As of January 1, 1997, the Kennedy - Kassebaum Health Bill will take effect. One of its provisions relates to the aforementioned transfers of property by Medicaid applicants to their children or other donees. After January 1, 1997, both the Medicaid applicant/donor and his or her attorney can incur a criminal sentence of up to 1 year in jail and a possible $10,000.00 fine for such a transfer, if the intent of the conveyance was "for an individual to become eligible" for Medicaid. For further details I would recommend to you the September 23, 1996, issue of Lawyer's Weekly USA, page 1. If any lawyer in the Macon Circuit practices in the area of Estate Planning or Elder Law, I especially advise scrutiny of the statute itself.
Although there appear to be some technical defects and constitutional problems in the statutory language that might impede enforcement and sentencing, the possible impact of such a law is frightening. Please review the new law, P.L. 104 - 191 and/or take time to review the aforementioned article. I would suggest not only communicating your thoughts with your U.S. Representative and Senators regarding this matter, but also conveying this information to your clients.
Editor's Note: The Congress in Section 217 of the Health Insurance Portability and Accountability Act of 1996 added a new paragraph to 42 U.S.C. 1320a-7b(a):
"(6) [Whoever] knowingly and willfully disposes of assets (including by any transfer in trust) in order for an individual to become eligible for medical assistance under a State plan under Title XIX, if disposing of the assets results in the imposition of a period of ineligibility for such assistance under section [42 U.S.C. 1396p(c)]."
A discussion of medicaid criminalization appears in a current CLE seminar on Medicaid and Elder Law in Counsel Connect.