New law imposes penalties for non-exempt asset transfers
Does this new law only apply to “Community-Based” Medicaid?
- Yes. Community-Based Medicaid includes: home health services, private duty nursing services, personal care services, assisted living program services.
When will this new law take effect?
- October 1, 2020. Under the current law, there are NO penalties for asset transfers for purposes of Community-Based Medicaid eligibility. This new law will create troubling obstacles for the elderly and disabled due to the imposition of a look-back period. Since the Medicaid application process can take months to complete, we strongly urge you to contact our office right away to immediately implement appropriate planning measures.
What do you mean by a 2.5 year look-back?
- Medicaid transfer rules restrict Medicaid eligibility when individuals divest themselves of assets for purposes of establishing financial eligibility for Medicaid. This new law has expanded the asset transfer rules by creating a new look-back period of 30 months (2.5 years). Starting October 1, 2020, Community-Based Medicaid applicants will be required to provide 2.5 years’ worth of financial statements and explanations of certain transactions to the Medicaid caseworker.
What happens if I need Community-Based Medicaid but I recently made a gift to my children?
- This new law now mandates that a non-exempt transfer of assets render an applicant ineligible for a specific length of time. Penalty periods are calculated by determining the amount of the uncompensated value of the transferred asset and dividing that figure by the average cost of nursing home care in the region in which the applicant resides. The resultant number is the number of months of the penalty period. For example, a gift of $50,000 to a child in October 2020, with a divisor of $13,407 (Long Island), would result in a penalty period of 3.7 months.
Applying for Medicaid is often a complicated process and you may have numerous questions or may wonder whether you qualify for benefits in the first place. Successful planning and application for Medicaid benefits require both knowledge and expertise to help you get the best care while protecting your assets. Let our firm help you and your loved ones make this process as simple and painless as possible. Our firm is intimately familiar with the Medicaid system and how it works and we will guide you accordingly.
For more information about Medicaid planning and eligibility or to schedule a consultation
Contact us today at (631) 598-0337