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By John M. Bigler As regular readers are aware, for more than two years I've been writing articles about the "Granny Goes to Jail Act." That law, which was part of the 1996 Health Insurance Portability and Accountability Act, put the onus on the client for making an asset transfer that resulted in a period of Medicaid ineligibility. The law exposed the person who made the transfer, or anyone assisting him or her, to a possible criminal sentence of five years in jail and a $25,000 fine.
As I noted in my January 1998 article, the New York State Bar Association brought an action challenging the law. Two major developments occurred within the last month which should effectively put an end to the concerns raised by this ridiculous law. The first event of significance was a letter from U.S. Attorney General Janet Reno in which she declared that the Justice Department would not enforce the prohibition on Medicaid counseling nor would it defend the action brought by the New York State Bar Association. In a letter to congressional leaders Ms. Reno indicated that the law "plainly is unconstitutional under the First Amendment and cannot survive judicial scrutiny". She went on to state that the Justice Department "will not bring any criminal prosecution under the current version" of the statute. In response to this letter the Bar Association indicated that it will continue to seek a court ruling. New York State Bar president Joshua Pruzansky, while indicating that the letter was "an incredible victory for the right of counsel," also indicated that the Bar was concerned as to what would happen after this attorney general's tenure was over. Ms. Reno's letter indicated that the law was unenforceable as currently worded but left the door open for the possibility of different interpretations in the future. Therefore, the Bar was determined to continue the action. Strike 2: judge's injunction The second important development was a declaration reported in the New York Law Journal, April 14, 1998. U.S. Judge Thomas McAvoy issued a preliminary injunction barring the enforcement of the statute. The federal government argued against the injunction, indicating that there was no need for it in light of Attorney General Reno's letter. However, the judge indicated that in order to adequately protect First Amendment freedom of speech, the mere possibility of a future change in Justice Department policy allowing prosecution to go forward was sufficient to warrant the injunction. The judge noted "the chilling effect that unconstitutional burdens on free speech may occasion." The lead counsel for the state Bar Association, G. Robert Witmer, explained that many attorneys might not be aware of Attorney General Reno's statement and would, therefore, continue to avoid giving advice regarding transfers. As I stated repeatedly, in the past articles, the problem with this law is not so much what it says, but the impression that many lay people as well as attorneys had of the law. I strongly agree with Mr. Witmer that many attorneys and clients would welcome relief. However, the court decision now makes it clear that senior citizens will have access to elder law attorneys who will now longer have to fear that their advice will generate a criminal prosecution for either themselves or their clients. Finally, my original statement of two years ago, that this repugnant law would soon become nothing more than a footnote in elder law history, appears to have come true. Reprinted with permission of the Suffolk Times © 1999 [ Contact Us ] [ Guestbook ] [ Email ]  The Law Offices of John M. Bigler, Attorney At Law 1421 Wantagh Avenue, Wantagh, New York 11793-2206 1-888-ELDER-LAW · 516-409-6565 · Fax: 516-409-6522 E-Mail: info@biglerlaw.com · Web Site: www.biglerlaw.com |
In 1997, as part of the Balanced Budget Act, the law was modified so as to transfer assets for Medicaid after waiting an appropriate period of time. The maximum penalty under the new statute was a $10,000.00 fine and one year in prison.