Criminalization
Criminalization describes a series of laws that made it illegal to knowingly and willfully dispose of assets to meet Medicaid’s eligibility requirements.
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Criminalization involves a series of laws that make it illegal to intentionally get rid of assets to qualify for Medicaid.
This started on January 1, 1997, when the Health Insurance Portability and Accountability Act (HIPAA) was passed. This law states that those who knowingly and willfully dispose of assets to meet Medicaid eligibility standards for long-term care expenses are subject to criminal penalties if doing so results in a period of ineligibility for Medicaid benefits.
The Deficit Reduction Act (DRA) of 2005 later modified this law by extending Medicaid ineligibility to five years. This law encourages individuals to plan for long-term care in advance. It discourages hiding or disposing of assets to qualify for Medicaid benefits.
The Long-Term Care Insurance Partnership Program can be great for planning for long-term care expenses and avoiding Medicaid spend-downs.