Watch Your Language: D.R.A.

Orange City Iowa Estate Planning

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The Deficit Reduction Act of 2005 spread changes to the Medicaid rules over hundreds of pages of the federal code.

In 2005, Congress passed legislation which, among many, many other things, changed the way a Medicaid applicant's resources and past transfers are considered. This bill is called the Deficit Reduction Act of 2005 and was signed by the President on February 8, 2006.[Read More]

In 2005, Congress passed legislation which, among many, many other things, changed the way a Medicaid applicant’s resources and past transfers are considered. Some of the provisions allow states to provide services to more people.  This bill is called the Deficit Reduction Act of 2005 and was signed by President Bush on February 8, 2006.

Some of the specific changes the D. R. A. made include:

  1. Increasing the lookback period to sixty months for all transfers.
  2. Making the start date of the penalty period the date a Medicaid application is submitted.
  3. Limiting the primary residence exemption to $500,000 in equity (adjusted for inflation).  In 2020, the applicant’s primary residence will be considered exempt if it’s value is less than $595,000.
  4. Making most annuities, promissory notes, and mortgages countable resources.
  5. Providing document evidence of citizenship or nationality when applying for Medicaid benefits.

Just the changes to the penalty period calculation were projected to delay eligibility by an average of three months for 130,000 people by the end of last year.

If you want to learn more about how the Deficit Reduction Act of 2005 changed the Medicaid system as a whole, you can check out this 2006 report prepared by The Kaiser Commission on Medicaid and the Uninsured.

Fortunately, though, we’ve already done all the research and learned all the changes. Take advantage of our expertise and call us at (712) 737-3885 to get started.

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