Congress has established a variety of rules about ineligibility for Medicaid. In addition to these federal rules, there are also issues you should be aware of at the state level.
The ineligibility period for Medicaid is also referred to as a penalty period. This specifically relates to applicants who transferred assets shortly before applying in an effort to spend down what they had to qualify for the program.
What Do Medicaid Officials Look For?
State Medicaid officials will look at transfers made within 5 years of the person applying for benefits (the ‘look back’ period). For Medicaid purposes, a transfer is when you give away an asset of yours without receiving fair market value for it. The look back determines whether or not a transfer that you made of property to someone else will make you ineligible for Medicaid benefits for a period of time and as such have a penalty period apply.
What is a Penalty Period?
The length of that penalty period depends on the total amount transferred. All transfers should be made carefully because these can trigger Medicaid problems for you and even tax consequences for your loved ones.
Make sure that you consult with an elder law attorney directly before making any sudden and unexpected transfers. This is the best way to minimize the possibility of having to deal with the five-year look back period. While no one can predict when they might need Medicaid services, you should always be looking forward to the future and try to minimize the possibility of delays due to Medicaid penalty periods with MassHealth.
