Allocation of Transfer Penalty - When Community Spouse Makes Transfer and Then Enters Nursing Home

Allocation of Transfer Penalty – When Community Spouse Makes
Transfer and Then Enters Nursing Home

Transfers by the spouse of an applicant are considered in determining the Medicaid eligibility of such individual. Under prior law, such transfers would also be considered again in determining eligibility for a community spouse who subsequently was institutionalized. That is, transfers by a community spouse who was subsequently institutionalized resulted in a double penalty. OBRA ’93 (which hasn’t been changed by the current law) requires that a “reasonable methodology” be employed to apportion the period of ineligibility between the applicant and a transferor – spouse who is subsequently institutionalized.

Example: Individual is in nursing home. Transfer of assets by spouse results in a 20-month penalty period for individual. Eight months after the transfer, spouse is institutionalized. The remaining penalty period of 12 months is to be apportioned. Presumably, six months will be allocated to each so that individual’s period of ineligibility due to the transfer will total 14 months.

Keep in mind, that under current law the penalty commences as outlined in Post #15.

Note: If one spouse dies or leaves the institution, the remaining portion of the penalty is allocated to the other spouse.

Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.

© April 2009, Post #19