Bonita Springs Elder Law Lawyer Explores Medicaid Penalties
What is the Medicaid Look-Back Period?
In addition to strict income guidelines determining whether nursing home patients qualify for Medicaid, penalties also involve rules governing the Medicaid look-back period. Also referred to as the “penalty period”, the Medicaid look-back period evaluates dollar amounts of assets divided by the daily private or average monthly private rate of nursing home services. For example, if the average monthly cost of nursing home care in a particular state is $4000 and the patient received $60,000 in gifts during the penalty period, then the patient will be unable to qualify for Medicaid coverage for 15 months, ($4000/$60,000 = 15 months).
Fortunately, a Bonita Springs elder lawyer has in-depth knowledge of Medicaid’s complicated eligibility rules and may be able to help you find ways to reduce or eliminate months of Medicaid ineligibility.
Exemptions and Exceptions to Medicaid’s Penalty Period
Individuals needing Medicaid to pay for nursing home stays may be allowed to transfer assets to family members during the penalty period. In some cases, Medicaid applicants can transfer no more than $123,000 (as of 2018) to a spouse as long as that spouse is not applying for Medicaid or living independently in the home or special care community. A Bonita Springs elder law attorney understands this exception–the Community Spouse Resource Allowance–and can help you take advantage of this exemption, if necessary.
Siblings and Disabled Children
Medicaid applicants are also permitted to establish trusts or transfer assets to disabled children younger than 21 years old. Deeds to homes may be transferred to a sister or brother if that sibling has equity in the property.
Child Caregiver Exemption
This exemption is meant for adult children living with the applicant for at least two years before a Medicaid application is filed. The Child Caregiver Exemption permits the applicants to transfer a house to their children without penalty.
Debt Payment
If a Medicaid applicant was paying off bills during the look-back period, these debts are exempt from penalties. For example, if the applicant was paying off a mortgage, they could potentially turn a liquid asset into an exempt asset.
To learn more about Medicaid penalties, schedule an appointment with a Bonita Springs elder law lawyer today.