Medicaid is a welfare program funded by both federal and state governments. It was enacted to provide health care services for the truly impoverished of our nation. Eligibility for benefits under the Medicaid program is determined by each state, based on an individual’s assets and income. Recent legislation has made it extremely difficult to qualify for Medicaid benefits by gifting or otherwise disposing of personal assets for less than fair market value.

The Omnibus Budget Reconciliation Act of 1993 (OBRA ’93) provided that gifts of assets within 36 months (60 months for gifts to certain trusts) prior to applying for Medicaid could delay one’s eligibility for benefits. Other provisions of OBRA ’93 allowed a state to recover from a person’s estate (including trusts, jointly held assets, etc.) all of the payments made by Medicaid. Even gifts to one’s spouse do not help, since the combined assets of couples must fall within specified eligibility levels. These eligibility levels range from approximately $16,800 to $84,000, and are selected by each state. Some assets, such as a personal residence, may be exempt from the eligibility calculations.

If Medicaid is the only solution for providing long-term care to an elderly individual, inquiries should be directed to the local welfare office.