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By John M. Bigler There was a time during my presentations when I would joke that I wrote for the Times and then mumble underneath my breath that it was The Suffolk Times. It always got a chuckle from the audience. However, I can now say quite proudly that I have been a contributing writer to The Suffolk Times for the past 10 years. I have also noticed that more and more people on the North Fork recognize either my face or my name and that is always a good boost for the ego.
Now on to a more depressing topic, the Deficit Reduction Act of 2005 (DRA). As I have noted in earlier articles this year, this bill was signed into law on Feb. 8, 2006 by President Bush. It is an effort to recoup some of billions of dollars being squandered in the war. The bill just barely passed both the House and the Senate and greatly affects the ability of older and disabled people to protect their assets in the event of long-term catastrophic illness. The law became effective in New York on Aug. 1, 2006, so we still have very limited experience with it. There have been numerous articles written about the law and many conferences held to discuss it, but the bottom line is that nobody definitively knows what effect this law will have, other than to know that it will not be good. We still have spousal refusal and we still have no penalties for transferring assets when applying for community Medicaid. What we don't know is whether we will be able to use some version of the rule of halves, a very effective and fair planning strategy under the previous law that allowed an individual in the worst case scenario to save one-half of their assets. This is a very comforting fact for older people, who should not be anxious to give their assets away prematurely.
What could be fairer than for a person who was unfortunate enough to get the wrong disease, a disease that would have long-term medical ramifications, to be able to save only half of their money. In most countries the idea of losing half of your money because you became seriously ill is unthinkable, but for us it was an accepted method and the people who used it were grateful to have it. Now, we are unsure if a modified version of the rule of halves will work.
In order for an individual to be eligible for Medicaid in a nursing home, they must now make two Medicaid applications. First, they must have no more than $4,150, having transferred all of their other assets out of their names, and then they must file the first of two Medicaid applications. The idea then is that half the gifted money will be used to pay the nursing home and then the individual will be required to make a second Medicaid application. The method of repaying the nursing home is in question. We don't know under the new law whether the State will recognize that a penalty for transferred money is to be reduced when some of the gifted money is used to pay for the cost of the Medicaid applicant. We do not know in what form a payment could be made. Is it necessary under the new law for the applicant to execute a promissory note? Is it necessary to purchase an annuity to pay the nursing home until the penalty expires? Or can benefits be paid directly to the nursing home? All of these questions have no answer at the present time. Until someone is actually approved using one of these modified plans, we will not know if they will be successful. In the meantime, people are entering nursing homes and are uncertain whether they will have to spend every penny that they have. This is a sorry state of affairs. Just the fact that individuals will now be required to make two Medicaid applications shows just how poorly thought out and poorly constructed the new law is.
There are still a number of lawsuits challenging the constitutionality of the law. It is clear that a number of congressman and senators do not even understand it but voted for it anyway. I suppose some of them were too busy sending out e-mails to really take a serious look at the catastrophic ramifications of the new law.
Reprinted with permission of the Suffolk Times © 2006 [ Contact Us ] [ Guestbook ] [ Email ]  The Law Offices of John M. Bigler, Attorney At Law 1421 Wantagh Avenue, Wantagh, New York 11793-2206 1-888-ELDER-LAW · 516-409-6565 · Fax: 516-409-6522 E-Mail: info@biglerlaw.com · Web Site: www.biglerlaw.com |
Before I give an update the Deficit Reduction Act of 2005 (DRA), I would like to take my elder law hat off for a moment and put on the hat of newspaper reviewer, specifically, this newspaper, The Suffolk Times. I have been writing for the paper for more than 10 years now. I admit that when I first started writing the articles, I didn't pay much attention to the rest of the paper. I would receive the paper regularly, but merely go through it to find my article so I could cut it out and send it to the printer so as to burden each of my clients with all of my articles. However, at some point a number of years ago, I actually started slowing down and going through the paper. What I found was pleasantly surprising. This newspaper is not the standard local weekly edition. Maybe because the North Fork has become increasingly more populated, but the content in general, specifically the editorials and the articles, is always interesting. Just recently I very much enjoyed reading Diane Amussen's account of her attempts to find a family member in Cuba. Then there was a particularly well-written article by Denise Civeletti outlining the various lies of this country's administration regarding its fight against terrorism and the Iraqi war. As a lawyer, I could only help thinking that if there was a case against the government, that article would have been an excellent legal brief. And recently there was an article by Rebecca Packard reviewing the programs for caregivers at Peconic Landing. As an elder law attorney, the information that article provided will be particularly useful.