What happens when you have no money to get through a large penalty period?

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Most states have a hardship provision for situations such as this. Apply and report the transfers. Request a hardship exemption from the potential penalty citing the provision in your state's Medicaid policy manual if possible.
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Great question. I wish I knew. I hope there are some responses.
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Got any details?
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There is nothing you can do except to cover the expenses the best you can and wait for the penalty period to be over.
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I've inadvertently stepped into a hornet's nest, I'm afraid. GF is in a private memory care AL but I just found out that GM has essentially spent everything they had in doing so. She wanted to apply for Medicaid but due to some large gifts they made back in 2011, the penalty period they'll be slapped with will likely be large (unless I can show it was a one-time thing, which it was but I understand that's difficult to prove). In the meantime, GF needs care and there's no one or no money to provide it. AL suggested he be sent to the hospital for evaluation and then the hospital could arrange discharge for him to a Medicaid accepting facility. There are literally no assets - no house, etc.
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It is the problem with elderly people gifting. Since the gifts were 4 years ago, the penalty might not be as large as you think. Has Medicaid already been applied for and the penalty evaluated?
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From what you wrote, I assume you haven't applied for Medicaid yet. I would say to go ahead and apply since you can't wait out the five-year lookback. You may be pleasantly surprised. At least we can hope.
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It was one-time "gift" of around $110K as a result of some money they came into. I understand Medicaid can take it as a one-time event if you can show that it wasn't an attempt to dispose of assets. I see it as that way but who knows how they might rule on it. If they apply the penalty, however, there is no way to pay for his care through the subsequent penalty period and no one to provide care for him.
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Well, what's the alternative? NOT apply? You need to apply to find out what's going to happen. Have you consulted an eldercare attorney?
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An elder care attorney was consulted three years and paid mega $ to help sort out the estate. However, now he just keeps telling GM that she needs to get past the 5-year cutoff for this gift. But, he has no advice on how she is supposed to do it at this point. When there's no money, there's no money. My inclination is to go ahead and apply (because as you just state Bablou - what's the alternative) and let the chips fall where they may. I understand that may mean that GF ends up in the custody of the State but quite frankly, I have no idea what else we could do. GM is having her own severe health problems and is currently wheelchair bound so she cannot care for him. She's barely being cared for at home herself. Even if Medicaid hits them with a penalty period, there's nothing for them to go after for payment either.
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