Asset Transfer and Nursing Home Use: Empirical Evidence and Policy Significance

Due to concern that wealthy elderly Americans were transferring assets to gain Medicaid coverage for nursing home care, the Deficit Reduction Act tightened Medicaid eligibility rules. About 43 percent of all nursing home residents eventually become Medicaid eligible. Over the six-year period examined, the authors estimate that, when applying the DRA asset transfer rules, federal savings to Medicaid could amount to $1.87 billion.