ChristiansUnite Forums

Giving to churches by seniors threatened?
Little-noticed part of bill would penalize many for making donations


Churches and other recipients of charitable giving that rely on senior citizens could face severe hardship if a Medicaid rule-change tucked into a 750-page budget bill passes the House this week, advocacy groups warn.

Under current rules, a senior can give a gift to a church without affecting qualification for Medicaid assisted-living coverage, points out the conservative RightMarch.com. But the proposed legislation would take into account every donation for the five years preceding admission to a facility.

Opponents say the change will cause hardship for families of faithful givers who would face monthly nursing-home payments of $4,000 to $7,000.

Supporters argue the legislation is intended to stop wealthy seniors from transferring assets so they can qualify for the coverage by Medicaid, which was started in 1965 to assist poor families. It's the only government program that provides assistance for long-term care.

But Charles Sabatino, who runs the American Bar Association's Commission on Law and Aging, contends it's the poor and middle class who will get hurt.

"My concern here is that all the usual, normal caring family transactions that people engage in, without thinking of Medicaid, will be scooped up by this penalty," he said in an interview with National Public Radio. "… Anytime you give money away for whatever reason, you would get penalized for it."

The gifts taken into account, points out RightMarch.com, include college tuition for grandchildren; emergency help for family; Christmas, birthday, wedding and graduation presents; charitable and church donations.

Backers of the bill says they want to eliminate "Medicaid for Millionaires."

Stephen Moses of the Center for Long-Term Care Reform in Seattle told NPR, it's been possible for seniors to give away $50 million three years before applying for Medicaid and be accepted.

Because that loophole exists, he says, Medicaid wastes billions of dollars.

U.S. Rep. Joe Barton, R-Texas, said in a November letter to his House colleagues that the new rules would "eliminate fraud and abuse" by middle and upper-income seniors who move assets "to appear impoverished."

Congressional investigators, however, found that while seniors do give away a lot of their money, it's in small amounts – not the kind of transactions needed to hide family fortunes.

Opponents also say the bill wouldn't prevent lawyers from finding ways to "protect assets," and the unintended consequence of curbing regular giving by seniors will devastate churches.

The Senate version, the "Deficit Reduction Omnibus Reconciliation Act of 2005," passed Dec. 21, and the House is expected to take up its version today or tomorrow.

The relevant passage in the Senate version is on pages 154-155.

http://www.rightmarch.com/media/s1932passed.pdf