Apportionment of Transfer Penalty When Community Spouse Enters Nursing Home

Transfers by the spouse of an applicant are considered in determining the Medicaid eligibility of the individual. Under both the MCCA and the Deficit Reduction Act, such transfers will 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 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.

Under the Deficit Reduction Act, this allocation is particularly onerous as the transfer is deemed to have occurred at the date the individual would be otherwise eligible but for the transfer.

Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.
© February 2011, Post 135