How Will the New Congress Affect Key Elder Law Issues?

The Democratic Party’s takeover of both houses of Congress is likely to have financial implications for the elderly and their families, although how profound these changes will be remains to be seen.

Of greatest interest to elder law attorneys and their clients is what the change in leadership on Capitol Hill will mean for the fate of the Deficit Reduction Act of 2005 (DRA). The DRA is particularly important to the elderly because it severely restricts their ability to transfer assets before qualifying for Medicaid coverage of nursing home care. Democrats in Congress maintain that the law is unconstitutional because the version passed by the Senate and signed by President Bush was different from the version passed by the House.

After President Bush signed the measure last February, Democrats in the House fought to have the DRA’s two differing versions reconciled and voted on again, while Republican leaders said they were content to rely on the courts to straighten the matter out.

“We’re going to keep pressing on this,” Brendan Daly, a spokesman for Nancy Pelosi (D-CA), told ElderLawAnswers at the time. “It could be [resolved legislatively] if they wanted to do it. It wouldn’t be that difficult a thing; they could just fix it and then call for a re-vote, but they don’t want to do that because it’s a controversial bill.”

When the Democrats got nowhere legislatively, eleven Democratic House members filed suit to have the law overturned.

Daly has not yet commented on whether the Democrats will force a re-vote on the DRA once the new Congress is in session. Narrowly passing in the Republican-led Congress, the measure now would almost certainly be defeated.

Other areas of interest to the elderly and their advocates include:

The estate tax : A Democratic Congress spells the death of efforts to repeal the “death tax,” as it is referred to by its critics. But while Democrats have opposed full repeal of the estate tax, many support increasing the exemption amount, which currently stands at $2 million and will rise to $3.5 million in 2009 before the current law expires.

Social Security privatization : The election means the final nail in the coffin for President Bush’s efforts to allow Social Security beneficiaries to set up private accounts.

Prescription drugs :Drug prices could fall as a result of the Democratic victory, and drug company stock prices have already dipped in anticipation. Rep. Pelosi, who will be the new House Speaker, says changing Medicare to allow the federal government to negotiate drug prices is a top priority. But President Bush would likely veto any bill that mandates negotiations. Look for Democrats to attempt other fixes to Medicare Part D as well, although their changes will have to be moderate enough to garner bipartisan support and avoid a presidential veto.

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