Pursuant to the applicable provisions of the Federal Deficit Reduction Act of 2005 (DRA 2005), the look back period for Medicaid is five years (60 months). That federal statute requires that any uncompensated transfer that occurred during the relevant look back period will cause a penalty period with regard to the receipt of Medicaid benefits. The penalty period is the amount of the uncompensated transfer ( say gifts of $68,000)divided by the state's reimbursement rate (Maryland is $6,800). The result is ten (10) months that will constitute the penalty period. The penalty period begins in the month in which the…
Transfers of Assets: States are required to have provisions regarding transfers of assets for less than fair market value under sections 1902(a)(18) and 1917(c) of the Act. A State Medicaid plan must provide that, if an institutionalized individual or the spouse of an individual transfers assets for less than fair market value after the “look-back” date defined in the statute, the State will calculate and impose a period of ineligibility. Medicaid payment is not available for the long-term care services the individual receives during the period of ineligibility, although the individual remains eligible for Medicaid coverage of non-long term care…
In 2009, your father was 80 years old and in reasonably good health. He gave $20,400 to his grandson to pay for college in 2009. However, last month he has a stroke. As a result of the stroke, he is totally incapacitated and in need of nursing home care. However, he is not yet in a nursing home, but his total assets are $2,000. During this month, you inquire about his placement at a nursing home. The nursing home questions you about your father’s finances and any past transfers, and you report the $20,400 gift made for his grandson’s education….
A five-year look-back period retroactively for all gifts or other transfers made for less than fair market value (FMV). Grandfather made gifts of $200 to each of his five grandchildren on each of their birthdays and on one of their religious holidays in 2006, 2007, 2008, 2009 and 2010. He is unaware of the Medicaid laws. Grandfather requires nursing home care. Under the Medicaid rules, Grandfather is penalized for all gifts made within a five year period. Therefore, Grandfather is penalized for approximately one and a half months, during which time Medicaid will not pay for his care in the…
We frequently hear from individuals who have gifted $12,000 each to their children and grandchildren, over the past few years. However, this gifting is a myth. In fact, the $12,000 figure is now $13,000. But this is an IRS rule regarding filing a gift tax return. This has nothing to do with Medicaid law. If you make a gift, within five (5) years of qualification of Medicaid, you will penalized. For example. If you gift to your family $68,000, within the five (5) year period, you will be penalized for TEN (10) months, before you receive Medicaid. Therefore, who will…
So, when is the right time to start planning? You should pick up the phone right now and call Senior Life Care Planning at 301 663 9230 or email our office.
The Deficit Reduction Act (DRA), signed by then President George Bush significantly changed the rules regarding transfers, for non-services, or gifts of assets (Gifts). Any Gifts made prior to enactment of the DRA on February 8, 2006, Maryland Medicaid officials review all documentation, bank statements, mutual funds, CD’s etc. for any Gifts made within the 36 months of the Medicaid application (or 60 months if the Gift was made to an irrevocable trust). However, for Gifts made after the enactment of the DRA the so-called "look back" period for all Gifts is 60 months. The “look back” period determines what…
Frederick, MD 
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