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For people with dementia, their inability to handle their
own financial affairs is often one of the first symptoms
of cognitive impairment. They may unintentionally destroy
or hide important financial records, inadvertently dispose
of cash or other assets or neglect to pay bills. In addition,
individuals with Alzheimer’s are especially vulnerable
to financial exploitation and abuse due to the impaired
judgment and reasoning that accompanies dementia. These
people may be adversely affected by provisions in the Deficit
Reduction Act of 2005 (DRA), which included new financial
restrictions on who can qualify for Medicaid nursing home
coverage.
Under the DRA, states can examine all asset transactions
in the five-year prior to application for Medicaid. If the
state finds an improper transfer of assets, the state will
delay the applicant’s Medicaid eligibility beginning
on the date of application for the program. Current law,
which begins the penalty period at the time of the asset
transfer, would continue to apply to transfers made before
the bill was enacted.
The DRA requires the Secretary of Health & Human Services
(HHS) to establish a “hardship waiver” process
that applicants can use to appeal denial of Medicaid. To
obtain a waiver, applicants’ health or life would
have to be endangered or they would have to be deprived
of food, clothing, shelter or other necessities. The state’s
procedure must notify applicants of the availability of
the waiver, provide a timely decision and have an appeals
process. During the appeal, the state may pay the
nursing home for up to 30 days of care.
These restrictions related to asset transfers will be very
difficult to meet for people with dementia who cannot reconstruct
missing financial records or properly document asset transfers.
For all Medicaid applicants, the change in the start date
of the penalty period may cause a delay in when Medicaid
will start paying the nursing home bill, even if the family
has no money to pay for care or cannot safely care for their
loved one.
In order to ensure that implementation of the DRA protects
individuals with Alzheimer’s disease from undue hardship,
the Alzheimer’s Association recommends requiring the
hardship waiver process to take into account the special
circumstances of people with dementia, including:
Their potential inability to produce required financial records. Their impaired decision-making capacity regarding financial and other matters. The heavy health and financial burden their caregivers may face if Medicaid nursing home coverage is not available.
Next: Preserving Medicaid
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For all Medicaid applicants, the change in the start date of the penalty period may cause a delay in when Medicaid will start paying the nursing home bill.
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