Look-back penalty for Medicaid? - AgingCare.com

Look-back penalty for Medicaid?


If I transferred say $40000 a couple years ago and applied for Medicaid then they would penalize me for say 4 months before I could get Medicaid. What if I applied for Medicaid 4 months early? I would not care about the 4 month penalty?

This question has been closed for answers. Ask a New Question.


Look-back & Transfer penalty period starts the day of the medicaid application & not the day of the transfer. So a transfer done 3 years ago starts the clock the same as one 3 months ago. It has to be a full 5 years outside the date of the medicaid application to be beyond a lookback unless fraud is suspected (I think it can go 10 years deep for fraud). The rules on how penalty are evaluated changed to a uniform system due to Bush era DRA (deficit Reduction Act - 2005). States signed off on DRA between '06-'10.

One issue that comes up for transfer penalty is they go into a NH as "Medicaid pending" & just are paying the required co-pay (their SOC/share of cost) of their monthly income (like thier SS) to the NH. And Medicaid application review can take time (for my mom in TX it was a 5 & 1/2 mos). So if a 40k penalty for TX (40k divided by $ 155 a day so is 8.6 month penalty period) is discovered at month 5, that means the DPOA or family will have to come up with the private pay balance due for month 1 - 5 PLUS continue to private pay till the end of the penalty period. And the amount due will not be the lower state reinbusement rate but whatever private pay rate the facility charges. So 8.6 mos penalty at 8k private pay rate is $ 68,800. Yes, 69k. So it can be more than the 40k gifted as the penalty is by # of days.

Please, please realize that the facility will get the transfer penalty notification as well. Either you personally sign a contract ASAP & start paying or the facility will send the resident & their DPOA a "30 day notice". The 30 day is also sent to APS & the local Medicaid office (where the caseworker is) & perhaps to the local Area on Aging as AoA do the ombudsman programs.

Ignoring a 30 Day leaves facility little choice but to go the nuclear route ....which is to file for an emergency ward of the state action to be done. Court will appoint a guardian who becomes totally in charge & family does not need to be consulted. It is not pretty. Just think how beyond awful for the elder this could be. Personally if I knew there was a transfer penalty I would NOT file an application for Medicaid but private pay for the NH or for in-home care and meet with ASAP with elder law atty to see what (if anything) could be done to lessen the transfer penalty. If the 40k is big withdrawal(s) and the check(s) made out to family there likely is no reasonable way around the transfer penalty. Whomever got the 40 large needs to repay the 40k & your elder does a legitimate spend down to get to Medicaid impoverishment level.

As a aside on this, there was a post on AC awhile back on $ gifted by grannie to grandkids for college & wedding. It was a good amount of $ too, like 100k. DPOA had no kids, $ went to nieces. All financial responsibility fell to DPOA to private pay. Pretty deep rift in family as neither grandkids or their parents felt any need to contribute nor could they be made to.
Helpful Answer (1)

The transfer penalty is roughly an equation based on the amount your states Medicaid program reinburses a facility for the elders room & board & the amount of the penalty.

So it will vary by state. Add to this that some states a very very low R&B (southern) while others (upper east coast) much higher. So 40K say in TX which has $ 155 R&B (when my late mom was on Medicaid) is 258 days penalty & ineligible for Medicaid to pay. But penalty period would be half that amount of time for a state that pays $ 310 a day.
Helpful Answer (1)

This question has been closed for answers. Ask a New Question.