What Are Medicaid Transfer Penalties?


Medicaid is a fairly complex but important healthcare program, and professional Medicaid planning can help you to avoid penalties and maximize on benefits. One of the pitfalls to avoid are Medicaid transfer penalties. Here’s some advice on this issue from an experienced elder law attorney in New Jersey.

Understanding Medicaid Transfer Penalties

In the State of New Jersey, you need to meet certain qualification criteria in order to be granted access to Medicaid benefits, and some of these criteria revolve around the value of your assets.

Medicaid transfer penalties are designed to prevent people from gifting assets away within the 5-year look back period in order to access their Medicaid benefits earlier. This penalty can be severe. It is calculated by adding up the value of all the assets that have been transferred or gifted away and dividing that by the penalty divisor, which is currently set at $343.85 per day or $10,458.77 per month. However, many times your total gifted assets can be divided by this amount determines how many days of coverage will not be covered by Medicaid.

For example, if your total gifted assets amounted in value to $3,438.00, you would have to cover your own costs for a total of 10 days (which can amount to significantly more than $3,438.00, especially if you are in assisted living or require skilled nursing care). You can see that if the amount is much higher, which is likely for many Medicaid applicants, the penalty wait period can quickly amount to concerningly high costs.

How to Avoid or Minimize Medicaid Transfer Penalties

Here, you have a few options:

Have the Gifts Returned: 

This is not an easy process to clear with the Medicaid agency, and should only be attempted if there is no alternative. There is no clear precedent for Medicaid appeals based on the return of gifts although some cases have had some success. And, therefore, it’s advisable to have an elder law attorney in New Jersey to argue your appeal for you in this type of situation.

Limit Your Transfers to Those That Don’t Carry a Penalty: 

Some gifts and transfers don’t carry a penalty, like those to a spouse or a disabled child. Your primary residence can be transferred to your child of under 21, a child who has been your primary caregiver, or a child who has an equity share in the property. Again, these are fairly complex processes and, like any legal issue, have to follow an exact process in order to be seen as valid and meeting these specifications. An elder law attorney is an invaluable resource for managing these processes and ensuring your application process goes smoothly.

Avoid Transfer Penalties Through Medicaid Planning

The best way to avoid all kinds of Medicaid penalties, including transfer penalties, is through professional Medicaid planning.

Frank R. Campisano is a highly experienced and compassionate elder law attorney in New Jersey with considerable knowledge of Medicaid issues. In addition to planning ahead financially for Medicaid eligibility, he is also able to assist with NJ Medicaid applications, appeals and other Medicaid issues. If you or a family member needs assistance with their Medicaid planning or protecting their assets effectively, don’t hesitate to get help today.

In addition, you can also prepare additional estate planning documents, such as your Last Will and Testament, Health Care Proxy, Power of Attorney documents, and trusts.
For a free consultation and Medicaid assistance or NJ estate planning, please contact us today and speak to Frank R. Campisano, or visit our website at https://www.scclegal.com/

Recent Posts



Call Now