New Community Medicaid Transfer Penalties: How the Penalty is Calculated

Woman using a calculatorWe have seen that applicants for Community Medicaid will be subject to a new 30-month look-back period beginning October 1, 2020. Applicants who sold non-exempt assets below fair market value, transferred such assets to others, or simply gave them away within 30 months of the application date will now be subject to a penalty period. (These transactions are often called “uncompensated” transfers.) During the penalty period the applicant will be ineligible to receive Community Medicaid to pay for home care, private duty nursing, personal care, or the assisted living program (ALP).

Calculating the Penalty

When you apply for Community Medicaid to pay for your care, Medicaid will now “look back” at your financial transactions from the previous 30 months. If Medicaid finds any uncompensated transfers of non-exempt assets, it presumes the transfers were made in order to qualify for Medicaid. The total amount of transfers found is divided by the monthly cost of care in your area, and the quotient is the number of months that Medicaid will not pay for your care. That is, the quotient is the length of time your penalty will last.

Here’s a relatively simple example. Let’s say in the 30 months before you applied for Community Medicaid you gave your grandchild a total of $10,000. Meanwhile, the monthly cost of home care in your area is $1,000. Since 10,000 divided by 1,000 equals 10, your penalty period would be 10 months. Thus you would be ineligible for Community Medicaid for 10 months.

Obviously, if you made significantly larger uncompensated transfers, your period of ineligible for Community Medicaid would be significantly longer.

The Estate Planning and Elder Law Group can use a wide range of tools and strategies to protect your life savings against the transfer penalty while still preserving your eligibility for Community Medicaid.

The time to take action is now! If you apply and are eligible for Community Medicaid before October 1, 2020, any uncompensated transfers you made in the past will not be subject to the new penalties.

We believe it so important for you to begin the process now that we are offering you a FREE consultation until August 31, 2020. To schedule your free consultation, call us at (718) 514-2066. You can also go to or email us at [email protected].

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