DRA Effective Date - February 8, 2006 - Transfer Penalty Calculation Changed

Oftentimes a client asks "I heard that Medicaid law changed recently - when did it change and how does it effect me?"

The change those clients are referring to in the enactment of the Deficit Reduction Act of 2005 or DRA.  The effective date of the DRA is February 8, 2006 (the date President Bush signed the DRA into law).

February 8, 2006 is a line in the sand from a Medicaid Asset Protection perspective.  Transfers or gifts made prior to that date are subject to a 3 year lookback period, and the penalty for transfers reduces each month starting with the month of the gift.  Transfers or gifts made after that date are subject to a 5 year lookback period, and the penalty for transfer doesn't begin to run until after you are already in a nursing home.  For more detailed information, look to my prior post What is the Medicaid Look-Back Period under the DRA?

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