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THE DEFICIT REDUCTION ACT 2005

The Old Rules Prior to DRA - 05 The New Rules Post DRA - 05
State Division of Medicaid Assistance Office of Medicaid
3 year (36 month) look-back period for transfers to individuals; 5 year (60 month) look-back period for transfers into/out of trust 5 year (60 month) look-back period for all Transfers
Penalty period began to run from the 1st of the month, in which the transfer was made Penalty period does not begin to run until the applicant is in the nursing home, applies for Medicaid and is otherwise eligible
Additional funds could be used to purchase non-countable annuities Annuities for institutional spouse requires the State be named as the primary beneficiary
First $99,540. could be kept by the community spouse First $101,640. may be kept by the community spouse
Enhanced CSRA would come from the couples' assets, above the $99,540. Enhanced CSRA must first come from the institutionalized spouse's income and then if additional funds are needed they may be taken from the assets above $101,640.
House value was not a factor House value over $750,000. is now countable if  spouse or disabled child is not living there
CCRC entrance fee refunds were not considered CCRC entrance fee refunds are considered countable assets
Promissory Notes were not monitored Promissory Notes must be "actuarially sound"
Life estates could be purchased without restriction Life estates can be purchased under certain restrictions
States had the option to disregard fractional transfers States are required to impose penalty periods no matter how small the transfer