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This is the fifth in a series of articles by elder law attorney Richard Habiger, published exclusively in the SENIOR VOICE, which discuss changes to the Medicaid law that will have a devastating impact on many middle class families in southern Illinois.

Life Care Planning, Estate Protection, Disability,
VA & Medicaid Assistance Lawyers

Not So Fast: Typo in New Medicaid Law Creates Confusion

Not So Fast: Typo in New Medicaid Law Creates Confusion


                        A small typo in a new Medicaid law, the Deficit Reduction Act (DRA), is spawning confusion and a federal lawsuit. The DRA, which makes drastic cuts to Medicare and Medicaid, was signed into law February 8, 2006, by President Bush.  However, the version he signed is different from the bill passed by the House of Representatives.


            Within days, a federal lawsuit was filed in Alabama challenging the constitutionality of the DRA.  The attorney who filed the suit said, "An eighth-grader in civics class knows that a bill cannot become law unless the identical bill passes the House and Senate and is signed by the president."


New Law Harms Elderly


            The controversy over the new law, which, among other provisions, would place severe new restrictions on the ability of the elderly to transfer assets before qualifying for Medicaid coverage of nursing home care, has also touched off a partisan battle in the House.  Democrats do not appear to be backing down from their insistence that the legislation be voted on once again, a development that House Republicans, who were barely able to muster the votes needed for passage, would very much like to avoid.


            The 750-page law passed the House by a razor-thin margin of 216-214.  Democrats attacked the measure as an assault on elderly and disabled Medicare and Medicaid patients and other vulnerable groups and said it was a prime example of the powerful influence of lobbyists for corporate interests like drug manufacturers and health insurers, who got much of what they wanted in closed-door negotiations with Republican lawmakers.  "This is a product of special interest lobbying and the stench of special interests hangs over the chamber," said Rep. John Dingell (D-MI).


            Thirteen Republicans and all House Democrats, including Jerry Costello (D-IL 12th), voted against DRA.  Southern Illinois Republican John Shimkus (R-IL 19th) voted for the bill.


The Lawsuit


            The federal law suit challenging the constitutionality of the DRA was filed by attorney Jim Zeigler, who was a Bush delegate to the Republican National Conventions in 2000 and 2004 and served on Bush's legal team in Florida in 2004.  Zeigler said "I don't know whether to have my clients comply with the post-February 8 version that I am alleging is unconstitutionally enacted, or the pre-February 8 law, which obviously is constitutional."

            Legal scholars appear divided about the issue.  "I think it is straightforward that the constitution requires the House and Senate to each pass the same bill," said Michael Gerhardt, an attorney who teaches constitutional law at the University of North Carolina School of Law.  But Brannon Denning, a professor at Samford University's Cumberland School of Law in Birmingham, Alabama, said he thinks a federal judge would be reluctant to nullify the law.


Living in Limbo


            In the meantime, this author suggests that it is safer to base long term care planning on the belief the DRA is a valid law than to run the risk that the measure will be found invalid.  In other words, it is best to assume that the DRA has in fact closed certain asset transfer "loopholes."


            But this does not mean that you should stand there like a deer in the middle of the road with a fixed glaze staring into the lights of an oncoming truck.  Many planning options remain untouched by the new legislation.


            While the new federal law applies to all transfers made on or after February 8, it also gives the states time to come into compliance. This means that families who are facing the high costs of long-term care (e.g., in a nursing home) still have a little time to plan under the old law.  But the length of time is uncertain and will need to be constantly reassessed.


            What does all of this mean to you, the reader?  If you may eventually need long-term care, you should run, not walk, to an attorney who is qualified to help put a good plan in place before it is too late.  If you know someone who has a medical condition, such as Alzheimer's, Parkinson's, ALS, or stroke, or is at risk for such medical conditions, reach out and help that person obtain the legal assistance they most definitely need.  In most cases, such debilitating medical conditions inevitably and unavoidably require care in a long-term care facility and can truly cause a family to go broke.  This need not happen if you take action now.


            Richard Habiger is an elder law attorney.  You may contact him at 618-549-4529 or