Multiple Transfers During the Lookback Period

To understand the effect of multiple transfers during the current 60-month lookback period, a review of the prior law under OBRA '93 would be helpful.

Under the prior law, there are two basics situations with respect to such transfers. One relates to overlapping penalty periods and the other relates to a penalty period expiring prior to the date of the subsequent transfer.

Under OBRA '93, overlapping penalty periods were governed by N.J.A.C.10:71-4.10(m)2., which provides:

" In the case of an asset transfer which occurs during an existing transfer penalty period, the penalty for the subsequent transfer shall not begin until the expiration of the previous penalty period."

The regulations made it clear that if a penalty period expires prior to the date of a subsequent transfer, transfers would not be aggregated ( even if within the 36-moth lookback period). Under OBRA '93, consider the following example:

Individual transfers $24,000 on January 1, 2004 and another $24,000 on February 1, 2004. Individual applies for Medicaid on July 1, 2004. Assume penalty rate of $6,000 and other eligibility requirements have been met. The penalty for the February transfer cannot commence until the penalty for the January transfer expires on May 1. The penalty for the February transfer commences on May 1 and expires on September 1. Application for Medicaid will be denied.

The prior concept regarding multiple transfers have no applicability for multiple transfers under the Deficit Reduction Act. Keep in mind that the key date which triggers the lookback period is the date on which an individual is eligible for Medicaid but for the application of the penalty period ( see post 15 regarding the New Transfer Rules). Therefore, it is logical that any transfer 60 months prior to the new date would deemed to have been made at the date of application (since new rules commence February, 2006, the full 60-month lookback does not occur until February, 2011). Therefore, the new law aggregates all transfers made during the 60-month lookback period at the date of application.

Hopefully, this conundrum would not occur. For example, consideration could be given to a return of the monies transferred and the monies used on exempt resources such as prepaid funeral expenses, back taxes, or improvement of the home. The difficulty of justifying a transfer in most cases is discussed in Post 43. Parenthetically, the State is currently taking the position that any transfers by a resident of an assisted living facility cause permanent ineligibility.