New Medicaid Rules.

Medicaid is the means tested, joint federal-state government health care program that is also the leading provider of nursing home care in this country.

The 51-50 Senate vote that Dick Cheney came back from his trip to cast the deciding vote on would make qualifying for that program harder. The changes:

Bar a person with equity in a home of more than $500,000 from Medicaid coverage. States can raise the limit to $750,000. Currently, in most cases, a person can own a home of any value and still have their nursing-home bills covered.

Require states to look for inappropriate asset transfers during the five years before a Medicaid application, instead of the current three years.

Classify certain annuities as assets that trigger the waiting period; annuities sometimes are used to turn large assets into small, Medicaid-friendly payouts.

Medicaid is an awkward program that is the principal estate planning concern of middle class people today. It provides a de facto estate tax on far more people than the existing federal estate tax and seizes more farms than the federal estate tax does. It needs a major reform that rethinks responsibility for long term care.