Medicaid Penalty Period

1. Medicaid Penalty Period Here we will be discussing the Medicaid penalty period and how to avoid it. Gifting As A Spend Down Strategy gifting as a spend-down strategy is very common. The federal government uses the Medicaid look-back period to prevent Medicaid applicants from giving away or selling assets under the fair market value to qualify for Medicaid. Penalty Divisor Example Assume an applicant lives in a state where the Medicaid lookback period is 60 months and the Medicaid penalty divisor is $8,000. He gifted $400,000 to their child in order to get their assets below the Medicaid asset limit. This means he would have to pay their long-term care costs out of pocket for 50 months before they would be eligible for Medicaid benefits. Unintentional Look Back Violations Some of the instances that can lead to unintentional violations include:: Tax-Free Gifting Lack Of Documentation Non-approved caregiver agreements Exceptions and Exemptions Transfer Of Assets Between Spouses, Disabled Children, Adult Caregivers, Debt Payments are exceptions and exemptions from look back period. Elder Law Attorney Medicaid planning is complicated and should not be a do-it-yourself activity. An Elder Law Attorney who focuses on Medicaid Planning can help you successfully apply for Medicaid without violating look- back rules. Information Source https://rochesterlawcenter.com/medicaid/medic aid-penalty-period/