The Board of Health was authorized to conduct a study examining the Medicaid eligibility policy regarding transfer of assets by Senate Joint Resolution No. 85 agreed to by the Senate and the House of Delegates of Virginia during the 1980 Session.

In mid-December 1980, subsequent to the completion of this report, the Congress passed HR 8406, which included an amendment to the Social Security Act to specifically permit a state to promulgate a transfer of assets rule for its Medicaid program. The bill was signed by the President on December 28, 1980, and became P.L. 96-611.

This amendment permits a state to examine all transfers of assets within twenty-four months preceding the date of application for Medicaid eligibility, to determine whether any transfers for less than fair market value occurred. If one did occur, the state can find the person ineligible for Medicaid.

In addition, if the uncompensated value of the transferred property exceeds $12,000 the state can provide for a period of ineligibility for Medicaid which exceeds twenty-four months, so long as the period of ineligibility bears a reasonable relationship to the uncompensated value of the property.

This new law will enable Virginia to strengthen its current transfer of assets rule by going beyond the current one-year limitation. As soon as the federal regulations are promulgated, reconsideration of the present rule can take place.