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U.S. House of Representatives Votes to Deny Benefits
To Thousands of Nursing Home Residents


On February 1, 2006, the U.S. House of Representatives, by a narrow margin of 216-214, voted to pass the Deficit Reduction Act of 2005 (S. 1932), which includes numerous provisions aimed at denying Medicaid benefits to current and prospective nursing home residents.   A copy of the full text of the Medicaid provisions follow. Over the next few weeks, CANHR will provide more detailed analyses of the bill and its likely impact in California.

Some of the more onerous provisions:

  • Five Year Look Back:   Increasing the look-back period for transfer of assets from three years to five years to see if anyone has given anything away in those five years before they apply for Medicaid.   The result will be thousands of Medicaid applicants being denied eligibility for transfers made years before they even pondered the possibility of going into a nursing home. Your grandmother could have given her grandchild $5,000 four years ago for graduation, but will be denied Medicaid four years later because of that gift.
  • Outright denial of Medicaid to anyone with more that $500,000 equity in a home, unless there is a spouse or a dependent child living there. Given the housing values of homes in California, thousands of prospective Medi-Cal applicants will be automatically denied benefits for nursing home care. The DRA is already expected to cost California $1.7 billion in lost federal revenues.
  • Increasing Nursing Home Evictions:   Under state and federal laws, a nursing home cannot evict a resident who qualifies for Medicaid. However, they can evict a resident for non-payment. Residents whose applications are delayed or denied will be easily evicted, even if they had already exhausted their life savings paying privately for their care.
  • Encouraging Elder Fiduciary Abuse : The bill encourages elder fiduciary abuse by forcing people to take out equity loans or reverse mortgages to pay for care. While there are a few reverse annuity mortgage organizations that are reputable, applicants must live in their homes in order to qualify. RAMS are not available for those who are going into nursing homes. Thus, seniors and the disabled will be faced with sleazy mortgage lenders who will offer money for unconscionable rates that the seniors will never be able to pay.   They will have their homes foreclosed and that's just the start of the ramifications of this bill.
  • Proving "Hardship" : The sponsors purport to soften the blow to those denied benefits by including provisions that allow denied applicants to prove that a "hardship" would exist and allowing nursing homes to apply for exemptions.   However, these are not "exemptions" - these are administrative law proceedings.   It is doubtful that nursing homes are going to spend their funds representing poor people when it is easier and more cost-effective to simply evict them. In order to prove hardship, those denied Medicaid will have to be able to understand their rights, file for a hearing in a timely manner and have legal representation at fair hearings.   This is not likely to happen for the majority of elder and disabled applicants, who have already spent their assets and can't afford legal representation.

The latest version of the Deficit Reduction Act of 2005 can be found here:

The section affecting long-term care under Medicaid can be found here:

The list of House member votes on the bill can be found here, and California House members who voted in favor of the bill are listed below:

Voted Yes

Representative City
Dist.
Party
Mary Bono Palm Springs
45
R
Ken Calvert Corona
44
R
John Campbell Irvina
47
R
John Doolittle Roseville
4
R
David Dreir San Dimas
26
R
Elton Gallegly Simi Valley
24
R
Wally Herger Marysville
2
R
Duncan Hunter Alpine
52
R
Darrell Issa Vista
49
R
Jerry Lewis Redlands
41
R
Daniel E Lungren Folsom
3
R
Buck McKeon Santa Clarita
25
R
Devin Nunes Tulare
21
R
Richard Pombo Tracy
11
R
George Radanovich Mariposa
19
R
Dana Rohrabacher Huntington Beach
46
R
Ed Royce Fullerton
40
R
Bill Thomas Bakersfield
22
R

Did Not Vote

Representative City
Dist.
Party
Gary Miller Diamond Bar
42
R