Getting Stuck With the Tab

Critics of the new law said it will hurt those who have been following the old rules and those who have helped family members years before even thinking about nursing home care.

Bill Novelli, the CEO of AARP, said the changes "mean that a lower-income stroke patient could be prevented from entering a nursing home, even if there were no alternatives, simply because she had helped a grandson with college tuition years earlier. A private-pay nursing home resident could be forced out of the home for a period of time, even after all his assets were exhausted, because he contributed to a hurricane victim."

But supporters of the changes say the new law is designed to deter aggressive estate planning, not to trip up those who tithe to churches or give away money for other legitimate reasons. "If you transfer assets without . . . the sole purpose of qualifying for Medicaid, you're home free," said Moses. But, he added, "you better document it, because you'll have to prove it."

Imperfect Options

Proponents of the new rules see the changes spurring families to better plan for the possibility of nursing home care. But some of the leading options have major shortcomings, according to experts.

While elder law attorneys say they sometimes recommend long-term-care insurance, such policies are not available to everyone.

One such person is Ethel McNie, who has Alzheimer's and whose care at a Rockville nursing home is largely covered by Medicaid. Her daughter, Jamie McNie of Germantown, explained: "She tried to get the long-term-care insurance" well before any signs of dementia appeared, "but they turned her down" because she has diabetes.

Another private-pay possibility -- at least for some people entering a nursing home -- is a reverse mortgage, where the lender pays an older homeowner cash for the equity in a home. The loan is repaid when the borrower sells the home, moves or dies.

Janet Wells, director of public policy for the National Citizens' Coalition for Nursing Home Reform, said the new law's ban on Medicaid eligibility for those with home equity of more than $500,000 was an effort to promote home equity loans. "Such loans, however, are not always a good value," she said, "because interest and fees are deducted from the borrower's equity."

Who's Going to Pay?

Nursing home residents whose funds are running low and seniors who will soon require nursing home care could find themselves harmed by the new rules, according to elder law attorneys and consumer advocates.

"Families will be in greater crisis or nursing homes will be left holding the bag," Sabatino said, if suddenly people don't qualify for Medicaid after spending all their money. Nursing homes, which opposed the new rules, are likely to impose more rigorous screening processes for admission, say lawyers, because they will not want to subsidize residents who cannot qualify quickly for Medicaid. Attorneys also expect nursing homes to be more aggressive in evicting residents whose Medicaid eligibility is delayed and in pressuring families to pay bills that the government will never cover.

"They will go after somebody," said Ed Zetlin, manager of elder law services at Legal Services of Northern Virginia.

Reginald McNeil, a Fort Washington electrician, was sued by his mother's nursing home. She had lived there for about a year and expected, according to her son, that Medicaid would pay most of her bills. Several months after his mother's death and after her claim for coverage was denied, the nursing home sought $37,000 from McNeil, 42, claiming that he was his mother's fiscal agent. "I thought it was crazy," he said. "I always thought it was understood that I was not responsible for my mother's bills."

The debt was eventually settled through the sale of a modest townhouse that McNeil's mother had been renting to a relative.

Attorneys say it will be imperative for people to keep detailed financial records going back five years to prove that any asset transfers were not done for purposes of qualifying for Medicaid.

"My concern is I'm going to be flooded with clients who are stuck," said Zetlin. "Almost everybody I've interviewed has made some form of transfer long before they became ill, or some type of transaction they won't be able to account for." ·

Christopher J. Gearon last wrote for the Health section about the Medicare prescription drug program. Comments:health@washpost.com.