Congress passed the Deficit Reduction Act of 2005 in February of 2006. This law makes access to Medicaid more difficult by:

  1. extending the general look-back period from 3 to 5 years,
  2. delaying the start of the penalty period for transfers of assets within that period,
  3. limiting the amount of home equity that can be excluded,
  4. making a mandatory designation of your state as the contingent beneficiary of any annuities you own,
  5. requiring a mandatory shift of income from the nursing home spouse to the healthy spouse, and
  6. changing the test on when investment in an annuity is an excluded asset. The law has raised concerns that charitable donations, payment of college tuition for children or grandchildren, and gifts to children may be reachable by the state. Some also believe that children may become responsible to the state for their parent’s care.