What is a Medicaid transfer penalty and how is the penalty calculated?
HHSC imposes a transfer penalty for assets gifted or sold for less than fair market value within five years of applying for Medicaid nursing home services. When an exception to the transfer penalty does not apply, HHSC determines the fair market value of the transferred resource and imposes a penalty on the difference between the amount received for the asset and its equity value. This number is divided by the transfer penalty divisor in effect in the month in which application for Medicaid assistance for long-term care is made. For Medicaid applications filed on or after September 1, 2013, HHSC uses a transfer penalty daily divisor of $156.34. (Note: HHSC periodically changes the transfer penalty divisor to correspond with the average daily rate of nursing home care in Texas.) The resulting figure equals the number of days the Medicaid applicant will be penalized from receiving Medicaid nursing home services. This penalty period does not begin until the Medicaid applicant is otherwise eligible to receive Medicaid nursing home assistance.
Other Frequently Asked Questions
- Can a family member be paid for services provided to the Medicaid applicant?
- Can I gift or transfer assets for less than fair value and receive Medicaid nursing home benefits?
- Does Medicare cover nursing home care?
- How is medical necessity determined for Medicaid nursing home care?
- How is the Medicaid applicant’s home protected against the Medicaid Estate Recovery Program (MERP)?
- How much is the Medicaid copayment to the nursing home?
- I thought you could gift a certain amount each year without penalty?
- What are some strategies to getting under the Medicaid resource limit?
- What are the basic eligibility requirements for long-term care Medicaid in Texas?
- What do Medicaid nursing home benefits cover?
- What if medical necessity is denied?
- What is a Medicaid transfer penalty and how is the penalty calculated?
- What is a Qualified Income Trust (QIT)?
- What resources are excluded for purposes of determining Medicaid eligibility?