Indiana Closes Loopholes That Allow Seniors to Hide Assets to Qualify for Medicaid

Indiana officials are closing loopholes in state Medicaid law that allow residents to "shift assets" in order to meet Medicaid eligibility requirements and avoid the costs of receiving long-term care in a nursing home, the Indianapolis Star/Louisville Courier-Journal reports. Some state seniors shelter their money by purchasing savings bonds that do not count as assets, investing in rental property and then giving it away or buying annuities that are meant to preserve assets for heirs. But according to new rules, seniors who give away property within three years of applying for Medicaid can be denied eligibility for up to three years. State officials in June also made illegal the practice of "balloon-payment annuities" and the transfer of rental property. Trade associations that represent nursing homes say the loopholes are used by at least 10% of the program's beneficiaries, costing the state about $90 million annually. Medicaid pays for the care of about 45,000 Indiana nursing home residents -- two-thirds of the total number in nursing homes in the state. State officials say the new rules could save approximately $35 million per year (Corcoran, Indianapolis Star/Louisville Courier-Journal, 8/12).