Elder Law & Estate Planning Attorneys
Medicaid and Transfer of Assets
Congress has established a period of ineligibility for Medicaid for those individuals who transfer assets during the five year “look back” period. While the look back period determines what transfers will be penalized, the length of the penalty depends on the amount transferred. The penalty period is determined by dividing the amount transferred by the average monthly cost of nursing home care in Pennsylvania—which, in 2019, is $10,420.14 for a private room. For example, if the nursing home resident transferred $60,000, the penalty period would be 5.8 months.
Furthermore, the penalty period will not begin until the person making the transfer has
1) moved to a nursing home, 2) has spent down to the asset limit for Medicaid eligibility,
3) has applied for Medicaid coverage, and 4) has been approved for coverage except for the transfer penalty. For instance, if an individual transfers $50,000 on April 1st, 2018, moves to a nursing home on April 1st, 2019, and spends down to Medicaid eligibility on April 1st, 2020 that is when the penalty period will begin.
Transfers should be made carefully with an understanding of all the consequences. People who make transfers must be careful not to apply for Medicaid before the five-year look-back period elapses without first consulting with an experienced Elder Law attorney. This is because the penalty could ultimately extend even longer, depending on the size of the transfer and the timing of the Medicaid application.
Remember: TRANSFERS SHOULD BE MADE CAREFULLY, WITH AN UNDERSTANDING OF ALL THE CONSEQUENCES.
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Levandowski & Darpino
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