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Medicaid's Nursing Home Coverage and Asset Transfers

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  • William F. Bassett

    (Board of Governors of the Federal Reserve System, Washington, D. C.)

Abstract

Medicaid covers the costs of a long nursing home stay. This coverage may create an incentive for the elderly to transfer their assets to their children to qualify for Medicaid before entering a nursing home. Previous researchers had found little evidence that such behavior was widespread or that asset transfers were large. However, data from the Study of Asset and Health Dynamics Among the Oldest Old (AHEAD) suggest that the self-assessed probability of entering a nursing home is a significant determinant of the likelihood of making an asset transfer. The budgetary implications of these Medicaid-induced asset transfers were probably fairly small at the time of the study, but not insignificant, and are likely to have risen steadily since.

Suggested Citation

  • William F. Bassett, 2007. "Medicaid's Nursing Home Coverage and Asset Transfers," Public Finance Review, , vol. 35(3), pages 414-439, May.
  • Handle: RePEc:sae:pubfin:v:35:y:2007:i:3:p:414-439
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    References listed on IDEAS

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    Cited by:

    1. Margherita Borella & Mariacristina De Nardi & Eric French, 2016. "Who Receives Medicaid in Old Age? Rules and Reality," NBER Working Papers 21873, National Bureau of Economic Research, Inc.

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