In order to be eligible for Medicaid, you cannot
have recently transferred assets. Congress does not want you to find out you
need nursing home care on Monday, give all your money to your children (or
anyone else) on Tuesday, and qualify for to have the government pay for your
nursing home long term care by qualifying for Medicaid on Wednesday. So it has
imposed a penalty on people who give away assets without receiving fair value
in return.
This penalty is a period of time during which
the person transferring the assets will be ineligible for Medicaid. The period
is determined by dividing the amount transferred by what your state Medicaid
program determines to be the average private pay cost of a nursing home in your
state.
Example: For example, if you live in a state where the average
monthly cost of care has been determined to be $5,000, and you give away
property worth $100,000, you will be ineligible for benefits for 20 months
($100,000 / $5,000 = 20).
In 2015 the State of Rhode Island has determined
that the average private pay cost of nursing home care is $9,113 per month.
Massachusetts, which determines the cost on a daily basis, has determined that
the number is $300 per day.
Another way to look at the above example is that
for every $5,000 transferred, an applicant would be ineligible for Medicaid
nursing home benefits for one month. In theory, there is no limit on the number
of months a person can be ineligible.
Example: The period of ineligibility for the transfer of property
worth $400,000 would be 80 months ($400,000 / $5,000 = 80).
A person applying for Medicaid must disclose all
financial transactions he or she was involved in during a set period of time --
frequently called the "look-back period." The state Medicaid agency
then determines whether the Medicaid applicant transferred any assets for less
than fair market value during this period. The look-back period for all
transfers is 60 months.
Under the current law, the Medicaid eligibility
penalty period will not begin until (1) the person making the transfer has
moved to a nursing home, (2) he has spent down to the asset limit for Medicaid
eligibility, (3) has applied for Medicaid coverage, and (4) has been approved
for coverage but for the transfer.
Returning to the example above, if an individual
transferred $100,000 on April 1, 2014, moves to a nursing home on April 1,
2015, and spends down to Medicaid eligibility on April 1, 2016, that is when
the 20-month penalty period will begin, and it will not end until December 1,
2017.
In other words, the penalty period would not
begin until the nursing home resident was out of money, meaning there
would be no money to pay the nursing home for however long the penalty period
lasts. In order to make sure your parent is able to receive the
nursing home care they need, it is critical to make sure they make adequate
arrangements with an elder law lawyer before gifting away their money or
property.
If you need assistance
understanding how any of these numbers impact you or a family member's
eligibility for nursing home coverage through medicaid, or with a
probate, estate planning or other elder law matters call the offices of
Fabisch Law, L.L.C. to set up a consultation with Rhode Island Nursing Home Lawyer Matthew Fabisch at 401-324-9344.
