White House would repeal 'granny-goes-to-jail' law Medicaid rule calls for year term in dumping of assets to get care


WASHINGTON -- Clinton administration officials urged Congress yesterday to repeal a new law that makes it a federal crime to dispose of assets to qualify for Medicaid coverage of nursing home expenses. They said that such abuses were not common.

Medicaid helps pay the bills for two-thirds of the 1.6 million people in nursing homes in the United States. Families can easily exhaust their assets on nursing home care because the costs average more than $100 a day -- much more in urban areas.

Many elderly people give assets to their children. But the new law, added to a broader health insurance measure, makes that illegal if the purpose is to qualify for Medicaid. It is not entirely clear which transactions may result in criminal charges. Critics cite this ambiguity as a serious defect in the law.

Moreover, Bruce Vladeck, administrator of the federal Health Care Financing Administration, which supervises Medicaid, said there was no evidence that large numbers of elderly people had given away assets to qualify for Medicaid.

"A few people doing something egregious can create a public perception of a widespread problem," Vladeck said.

Vladeck said Congress ought to repeal the criminal penalties, which took effect Jan. 1. And he said that his agency would not press states to enforce the new restrictions on transfers of property by people seeking Medicaid.

The American Association of Retired Persons, the Alzheimer's Association, the National Senior Citizens Law Center, the American Bar Association and the bar associations of New York state and Ohio have all called for repeal.

Patricia Nemore, a lawyer at the senior citizens law center, said: "The people likely to be jailed or fined are old, sick people needing nursing home care. The typical nursing home resident is an 85-year-old widow."

Under the law, a person who "knowingly and willfully disposes of assets" to become eligible for Medicaid may be fined $10,000 and imprisoned for one year. In general, a person will not be subject to criminal penalties if he or she gives away assets more than three years before applying for Medicaid.

Some members of Congress say it is possible that some violators could be subject to much stiffer penalties, including a $25,000 fine and imprisonment for five years.

Republican Rep. Steven C. LaTourette of Ohio recently introduced a bill to repeal the provision, which he described as the "granny-goes-to-jail" law.

LaTourette, a former county prosecutor, said, "The new law has scared and confused senior citizens" and might discourage eligible people from applying for Medicaid. Moreover, he said, "Adult children who assist their parents could also be subject to criminal penalties."

Pub Date: 2/18/97

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