AARP ads fight Medicaid changes

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The nation's top senior citizen advocacy group has targeted members of Congress with advertisements in their hometown papers opposing House spending cuts, largely because of the bill's provision to change Medicaid.

The reform proposal aims to prevent wealthy people from hiding their assets in order to gain Medicaid benefits.

The AARP says the proposal would deny nursing-home coverage to deserving people who had given financial gifts to family members or charities.

"We're going to just keep the heat up on this," said David Certner, AARP director of federal affairs.

The group ran ads Friday in the local newspapers of several Republicans, including some liberals, and of some key lawmakers who will help merge the House and Senate versions of the bill, such as Sen. Charles E. Grassley, Iowa Republican and Senate Finance Committee chairman.

The House passed the measure to trim $50 billion from mandatory spending programs. Its Medicaid provision essentially expands the pool of people who would be penalized for transferring their assets before applying for Medicaid.

AARP officials said the provision casts the net too widely.

Medicaid applicants are penalized if they transfer assets for less than fair-market value in the three previous years. The House bill would expand that "look-back" period to five years.

For example, if a man gave $20,000 to his grandson for college two years ago and now applies for Medicaid nursing-home coverage, he is denied the equivalent of $20,000 of Medicaid nursing-home coverage -- roughly four months, Mr. Certner said.

Under current law, the penalty begins on the day he gave the gift to his grandson, so it essentially would be waived. The House bill proposes starting the penalty on the day of the Medicaid application.

Mr. Certner said the changes are unfair.

"You're going to be catching people who are just ... helping a kid go to school, helping pay family medical bills, contributing to a church or charity," he said.

AARP prefers the Senate version of the bill, which makes fewer changes to Medicaid and trims $35 billion total in mandatory spending.

Kevin Madden, spokesman for Rep. Tom DeLay, Texas Republican, said AARP's arguments are "terribly misleading."

He said the provision aims to help those who need Medicaid by cutting waste and abuse.

"The whole effort behind this was an effort of reform so that Medicaid services get to those who need it most, and works most efficiently," he said.

AARP also opposes a provision in the House bill that would deny Medicaid coverage of long-term care to those who own $750,000 or more in home equity.

Proponents argue that the present system allows the owner of a $1 million home to qualify for Medicaid coverage for nursing-home care.

"We're just putting a little sanity in the system," said one House Republican leadership aide.