Page 52 - Senior Link Magazine Winter 2021- Online Magazine
P. 52
SENIOR RESOURCES
MEDICAID Updates Its
GIFT PENALTY CALCULATION
by Lee Franks
ith certain exceptions, assuming the person is otherwise It is not uncommon for a person,
Medicaid penalizes a person eligible except for the gift, but it will acting on bad advice, to convey his
Wapplying for nursing home not pay for room and board for the or her residence to the kids before
assistance who has made one or number of days that the gift or gifts applying for nursing home assistance.
more gifts within five years before would have paid for. If the residence was worth $120,000,
applying for assistance. Medicaid and the gift was made after September
reasons that, if a person gave money In general terms, Medicaid calculates 1, 2021, the penalty period would
or other property away, the value of this penalty period by dividing the be 504 days, more than a year and a
that property could have financed at gift by the average daily cost of care half. The kids might have to sell the
least the person’s room and board in Texas when the person made the residence just to help pay the bill.
at a facility for a while, depending gift. Medicaid calls this average the
upon how much the person actually divisor. From September 1, 2020, the The Medicaid rules, as applied to
gave away. Therefore, Medicaid will divisor was $213.71/day. Beginning nursing home assistance, do not
approve the person for assistance September 1, 2021, the divisor now forbid gifting, but the rules do impose
is $237.93/day. consequences for it. However, the
For example, if person making the gift usually has
a person gives some income, and he or she may be
$10,000 to the in a facility that charges less than the
kids, Medicaid state average. In the first example
imposes a above, the person gives away $10,000.
penalty period of If the person’s monthly income is
($10,000/$237.93/ $1,500 or about $49/day, and the
day) or 42 days. cost of care is $180/day, the shortfall
Critically, the would be about $131/day. For 42 days
person must the total shortfall would be $131/
reside in a day times 42 days or $5,502. If the
Medicaid facility kids paid the balance of the bill, there
and qualify for would still be $4,498 left over.
Medicaid before
the penalty Unplanned gifting can create real
begins to count problems for someone seeking
down. To qualify assistance for nursing home care,
for Medicaid, but as the example illustrates,
the person planned gifting can be an appropriate
must have less strategy. The information presented
than $2,000 in here necessarily leaves out a lot of
countable assets. detail, and gifting applies only to
Effectively, a part of the process of obtaining
someone else has assistance for nursing home care, but
to help pay the it does highlight the need for good
person’s room advice and counsel from an elder
and board at law attorney before making a gift or
the facility for applying for assistance.
42 days before
Medicaid will
start paying for it.
52 Lubbock Senior Link
