The consumer watchdog group Public Citizen has filed suit in federal court charging that the Deficit Reduction Act of 2005 (DRA) signed by President Bush on February 8 is invalid because the president signed a version of the bill that was passed by the U.S. Senate but not the U.S. House of Representatives. The measure barely passed both houses of Congress. The Constitution requires that before a bill can be enacted into law by the president, it must pass both the House and Senate in identical form. Due to a clerk’s substantive change as the legislation passed between houses, the president signed legislation that was passed by the Senate but not the House.
The consumer group said it does not expect a full hearing until late spring.
Meanwhile, House Democratic Leader Nancy Pelosi and Congressman Henry Waxman, senior Democrat on the House Government Reform Committee, have sent a letter to President Bush requesting clarification on his knowledge of what he was signing. The Wall Street Journal reported that after consulting with Senate Majority Leader Bill Frist (R-TN) about a problem with passage of the Deficit Reduction Act of 2005 (DRA), House Speaker Dennis Hastert (R-IL) asked that President Bush delay signing the measure, but the White House refused. According to the Journal, Hastert was informed of problems with the legislation only hours before the White House signing ceremony. He and Frist met and agreed that the signing should be delayed until the problem could be addressed by the House and Senate. Hastert's chief of staff, Scott Palmer, told the Journal that when the speaker and Frist went to the White House for the February 8 signing ceremony, they expected only a "mock ceremony." Instead, on the advice of White House attorneys, Bush went ahead and signed the actual measure. ("Watchdog's Suit Could Threaten Budget Cutbacks," WSJ, March 22, 2006; available online by subscription only.)
The law extends Medicaid's "lookback" period for all asset transfers from the current three years to five years, and changes the start of the penalty period for transferred assets from the date of transfer to the date when the individual transferring the assets enters a nursing home and would otherwise be eligible for Medicaid coverage. In other words, the penalty period does not begin until the nursing home resident is out of funds, meaning she cannot afford to pay the nursing home.
The law also makes any individual with home equity above $500,000 ineligible for Medicaid nursing home care, although states may raise this threshold as high as $750,000.
The new federal law applies to all transfers made on or after the date of enactment, February 8, 2006. However, the law gives states that must pass legislation to meet the new requirements more time to come into compliance. The deadline for states to enact their own laws varies from state to state, but generally it is the first day of the first calendar quarter beginning after the end of the next full legislative session.
Any asset transfer made before February 8 falls under the old transfer rules. But what about someone who transfers assets after that date but before his or her state comes into compliance with it? If the application is filed before enactment of the state law, it will probably come under the old transfer rules. If it is filed after the enactment of the state law, it will probably come under the new transfer rules. But to be sure, check with an elder law attorney.
- Adapted from: Elderlawanswers.com www.elderlawanswers.com/resources/article.asp?id=5297&print.x=35&print.y=9, www.elderlawanswers.com/resources/article.asp?id=5321§ion=4&state= and http://www.elderlawanswers.com/resources/article.asp?id=5298§ion=4&state=
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