By advising clients on Estate Planning, Powers of Attorney, Trusts, and Wills, Attorney Oliver W. Nelson has long recognized the concerns which families experience over the costs associated with long term and nursing home care.

In response, Oliver W. Nelson, P.C. concentrates in Asset Protection, Elder Law, Medicaid Applications, Irrevocable Medicaid Trusts, Living Wills, Revocable Trusts and Durable Powers of Attorney for Property and Healthcare.

With 31 years of experience, Attorney Oliver W. Nelson serves the needs of people in Belvidere, Byron, Cherry Valley, Freeport, Loves Park, Machesney Park, New Milford, Oregon, Rochelle, Rockford, Roscoe, South Beloit, Boone County, Ogle County and Winnebago County in Northern Illinois, from offices at 6885 Vistagreen Way in Rockford, Illinois (IL).

Keep it in the Family... call Attorney Oliver W. Nelson for a complimentary consultation.

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Citizens need to understand that Medicare and Medicaid are two Federal programs which were passed by Congress in 1965.

The Deficit Reduction Act of 2005 (DRA 2005) is one of the few changes to the Medicaid laws since 1965.

The DRA 205 is meant to affect our senior citizens who have experienced medical problems which are not covered by Medicare.

As a result, these people are in dire need of the services of a skilled nursing facility, but Medicare will NOT pay for their room and board at the nursing home.

Here is a short summary of four of the changes found in the DRA 2005:

• LOOK-BACK PERIOD. The DRA 2005 extends the look-back period from 36 months to 60 months for all Medicaid Applicants. This means that if someone applies for Medicaid Assistance, the State of Illinois has the right to ask you to produce any and all financial records, checking statements, C.D.’s, real estate deeds, annuities, life insurance, and savings account statements for the 60 months prior to the month that the Medicaid Application was filed. This can truly be a burden on the loved one’s family because most of the time the parents do not allow the children access to all of their records. In this way, the State of Illinois can find out if there have been any gifts to children or transfers of real estate to children in those prior 60 months.
• POSTPONING THE START OF THE PENALTY PERIOD. The DRA 2005 also starts the penalty or the period of ineligibility for past assets transfers when the loved one is residing in a skilled nursing facility AND his or her total assets equal $2,000.00 or less. This means that if you gave your children or your church $10,000.00 four years before you are out of money and you apply for Medicaid Assistance, the State of Illinois is going to take all those unallowable gifts or real estate transfers, add them up, and start the penalty or waiting period when you only have $2,000.00. Of course, the people who received the funds have already spent the money, so it remains to be seen as to whether or not the nursing home will put your loved one out on the street because he or she did not qualify for Medicaid Assistance.
• ROUNDING DOWN. The DRA 2005 does not allow states to “round down” any fractional penalty period. Let's say that the cost of care for one month at the nursing home is $5,000.00, and your loved one made a gift of $9,000.00 to her son four years prior to entering a nursing home. The State of Illinois will sweep up the $9,000.00 gift, divide that by the monthly cost of care, $5,000.00, and the result is 1.80 months of a penalty period. Under the "old rules," the penalty period would have been over with in one month, because they would just take away the 0.8 of a month. Under the DRA 2008, the Medicaid Applicant would be penalized for 1.8 months BEGINNING when the loved one is in a skilled nursing facility AND has $2,000.00 or less of assets. So, the family would have to private pay for those 1.8 months BEFORE the loved one would qualify for Medicaid Assistance.

I have created a more detailed summary of the DRA 2005, and if you wish to receive a copy of that summary, please send me an e-mail with your name, address, and phone number on it, and I will send it to you in the mail.

Please remember that I will talk to you in my office to discover whether or not we can help you preserve the family Estate, EVEN if your loved one is residing in a skilled nursing home.