AARP Launches Campaign Against Asset-Transfer Changes in Budget Compromise

AARP has launched a nationwide media campaign in opposition to provisions in the House budget reconciliation package (HR 4241) that would tighten Medicaid asset-transfer rules for long-term nursing home coverage, Washington Times (Fagan, Washington Times, 12/5). The House on Nov. 18 approved the five-year budget plan, which would save the government nearly $50 billion, including about $12 billion in spending cuts to Medicaid (California Healthline, 11/18).

AARP opposes provisions that would extend the "look-back" period for asset transfers for seniors seeking Medicaid long-term care coverage from three years to five, meaning that a senior who transferred $20,000 in assets five years ago would be denied the equivalent of $20,000 in Medicaid coverage. AARP also opposes a provision that would change the date that the asset-transfer penalty begins from day the gift was made to the day of the Medicaid application. This change would increase the likelihood that the penalty would affect a person's benefits.

AARP on Friday ran ads in local newspapers in the jurisdictions of influential Republican lawmakers, such as Senate Finance Committee Chair Chuck Grassley (R-Iowa) (Washington Times, 12/5). AARP "prefers provisions in the Senate budget package (S 1932)," which it believes "take a more targeted approach to eliminating provisions in current law that are often used to shelter assets," CQ HealthBeat reports.

Those provisions call for annuities to be treated the same as trusts under current law and for certain notes and loans to be considered countable when determining eligibility for Medicaid coverage (CQ HealthBeat [1], 12/2).

David Certner, AARP's director of federal affairs, said, "We're going to just keep the heat up on this." Certner said the House bill would "be catching people who are just ... helping a kid go to school, helping pay family medical bills, contributing to a church or charity."

Kevin Madden, a spokesperson for Rep. Tom DeLay (R-Texas), said AARP's arguments are "terribly misleading," adding, "The whole effort behind this was an effort of reform, so that Medicaid services get to those who need it most and works most efficiently" (Washington Times, 12/5).

AARP officials at a Friday briefing said they also are concerned about a Senate provision that would increase Medicare physician payments by 1% in 2006. They said the increase, which would replace a scheduled 4.3% cut, would increase beneficiaries' Medicare Part B monthly premiums by $2.50.

AARP officials said lawmakers could lessen the impact of the increased premiums by reducing beneficiaries' copayments for hospital outpatient services (CQ HealthBeat [1], 12/2). AARP also opposes a provision in the House bill that would deny Medicaid long-term care coverage to seniors with $750,000 or more in home equity. Current law allows up to $1 million in home equity (Washington Times, 12/5).

Senate Majority Leader Bill Frist (R-Tenn.) on Friday said Congress could complete negotiations on the final version of the budget bill "hopefully by the 19th or 20th" of December, CQ HealthBeat reports. Frist said that House and Senate leaders during a Republican leadership retreat looked at differences in the two versions of the bill, and, "on each one, although we didn't come to specific decisions, there is a sense that once conference begins formally, that we can accomplish that" (CQ HealthBeat [2], 12/2).

Jack Howard, a Republican lobbyist, said, "Because these bills are so fundamentally different, the next two weeks will look a lot like a two-minute drill in football." Tom Kahn, Democratic staff director for the House Budget Committee, said, "I think they're going to have one heck of a time getting this thing done by the end of the year, and I would be surprised if they could do it." The House has scheduled a two-week session beginning Tuesday, while the Senate does not return until next week (Taylor, AP/Miami Herald, 12/5).