We are applying for Medicaid but need to spend down $30,000.00 in the checking account, and will probably be penalized for about $20,000 that was gifted within past 5 years. Long-term care is $10,000/mo. Does that mean we pay for 5 months before we qualify? ($50,000.00 divided by $10,000.00)

Not exactly, the penalty is basically an equation based on the daily room & board reimbursement paid by the state to a facility. Division problem.

Say your state Medicaid pays a NH $185.00 a day R&B reimbursement. The amount of $ gifted by your elder within the 5 yr lookback was $25,000.00. 25K divided by $185 = 135 DAYS of ineligiblity. So basically 4 & 1/2 months of ineligiblity. Penalty date starts the day she signed off and filed for LTC Medicaid is my understanding.

Medicaid daily reimbursement figure is very important. Some states pay a low figure, like $165 a day, so will take longer to get past, while others pay over $300 a day, so penalty goes quicker.

Now there’s another rub in this; for the # of days of ineligiblity, the NH can determine if they are willing to accept the lower Medicaid day rate or if they want to charge you the full daily private pay rate. It seems to be open to some degree of negotiation. If you know going into the NH, that a penalty is looming for when she applies for Medicaid and she has a spend down to do before even applying for Medicaid, I’d try to have this worked out before you sign off on her admissions contract. If there is an obvious penalty, the place is likely to want you to personally sign off to be financially responsible for her bill.
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Reply to igloo572
rovana Feb 27, 2021
I'm curious about this issue. I understand the lookback and penalty issues, but can it work like this? Mom is approved for LTC Medicaid but there is a penalty period that equates to 4 months. Now can the family step forward and say "we will care for mom at home for these 4 months and then she can go to LTC on Medicaid?" Or does the family have to put her in the LTC and negotiate the rate/or pay the full amount until the 4 months have past? In other words, does the elder have to be in the nursing home and cover those costs before going on Medicaid?
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Yes. You don’t apply for LTC Medicaid before you go into a facility and need to pay for facility.
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Reply to Guestshopadmin

My Mom had no penalty but this is how it worked for her. She did not have quite 20k. In April I started the Medicaid process. My Mom was placed in a NH May 1st. She paid privately for May and June. During those two months I spent her down to under the 2k Medicaid allows in her bank account. I got them all paperwork needed. July 1, Medicaid started paying. NJ only allows 90days from time of application to spend down, get paperwork together and place the person.
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Reply to JoAnn29

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