NEWS RELEASE
Committee on Energy and Commerce Democrats
Congressman John D. Dingell, Ranking Member

GAO Report Found Little Data Exists to Support Claim
that Elderly Transfer Assets to Qualify for Medicaid

Washington, D.C. – Congressmen John D. Dingell (D-MI), Sherrod Brown (D-OH) and Henry A. Waxman (D-CA) today released a Government Accountability Office (GAO) report, Medicaid Transfer of Assets by Elderly Individuals to Qualify for Long Term Care, that said of the states reviewed for the report, none “systematically tracked or analyzed data that would provide information on the incidence of asset transfers and the extent to which penalties were applied in their state.”

“This report again demonstrates that the myth of the “Medicaid Millionaire” is indeed just that - a myth,” said Dingell, the Ranking Member of the House Committee on Energy and Commerce. “Few of the elderly have enough resources to support themselves, let alone enough to give away.”

The report found that States do not have consistent or comprehensive methods of determining or assessing whether an individual is transferring assets in violation of Medicaid law. The study also found that the reported total asset transfers for the majority of those over age 65 were for small amounts that averaged between $3,000 - $4,500, and for those individuals who fell below the median income and resource level an average of $2,000. Although these are frequently well-intentioned transfers, such as college assistance or a wedding gift to a grandchild, some States are applying the Federal Medicaid law in ways that could result in a loss of a month or more of long-term care.

GAO’s conclusions were drawn from a detailed review of nine States’ Medicaid programs. The data compiled for the report were based on an analysis of the incomes, resources and asset transfer histories of the entire elderly population over 65 years of age, not just those individuals applying for Medicaid.

“The number of transfers and amounts transferred among those applying for Medicaid are likely to be even lower given that this analysis includes wealthy seniors - not just those likely to apply for Medicaid,” said Dingell.

The GAO report also found a need for better guidance from the Centers for Medicare and Medicaid Services (CMS). According to the report, the CMS State Medicaid Manual, which provides guidance for States on how to administer Medicaid long-term care coverage, has not been updated since 1994 and offers little assistance on how States should treat certain types of transfers.

“Rather than foisting further hardship on the innocent, Congress should focus on getting CMS and the States to better do their jobs,” said Congressman Waxman, Ranking Member of the House Committee on Government Reform. “My sense is that problems, where they exist, would be better addressed by improved oversight and accountability on the part of those administering the program, rather than prohibiting those who need care from getting it.”

“The real challenge in Medicaid isn’t rampant fraud; it’s unmet need,” said Congressman Brown, Ranking Member of the House Committee on Energy and Commerce Subcommittee on Health. “As Congress contemplates a $10 billion cut in Medicaid funding, seniors in need of home and community-based care languish on waiting lists. The elderly have a right to know why Republican leaders are more focused on punishing the few than protecting the many.”

The report released today is consistent with a 1997 GAO report that found little broad-based empirical evidence on the number of Americans who transferred assets in order to qualify for Medicaid.

Dingell, Brown, and Waxman have requested a follow-up study in which GAO would conduct a more detailed review to learn about the actual prevalence of asset transfers for the purposes of becoming eligible for Medicaid.

The GAO report released today (GAO-05-968) will be available this afternoon on the GAO website at www.gao.gov.

- 30 -