Asset Transfer and Nursing Home Use- Issue Brief

Medicaid paid for nearly half of the $183 billion spent nationally for long-term care in 2003 (GAO, 2005). The aging of the population will increase need for long-term care services, and consequently federal Medicaid expenditures in the near future. While anticipating that Medicaid spending for long-term care will increase because of demographic trends, policy makers also are concerned that some individuals transfer assets just for the purpose of qualifying for Medicaid coverage for long-term care, thus unduly increasing Medicaid costs. At present, opinions differ over the extent to which individuals transfer assets to achieve Medicaid coverage and the impact of the practice on Medicaid spending.