When can we apply for Medicaid and avoid penalty?

Team - Medicaid isn't going to pay for 24/7 at home / community based care. In order for community based program to be available, it has to be cost-effective both for level of services needed and management of those services. Community based services is a waiver division of medicaid funding and can have very specific requirements for participation. The tipping point for community based is at round 34/38 hrs week of care. Over that, they need to be in a skilled nursing facility (a NH), OR perhaps be in a AL if there is an AL that takes medicaid wavers OR have family who does for free all the other 155/151 hrs of weekly caregiving (or private pays for it).

As an aside on this, the current trend for use of Medicaid diversion waivers by the states is PACE or PACE type of on-site participation program.

Do you have any idea of just how big of a transfer penalty? If not, I'd suggest you try to figure out what $ amount FIL is facing. It's roughly an equation based on your states daily room & board reinbursement to a NH by Medicaid and the value of the transfer. If its a real property transfer, the # is usually the tax assessor value at the date recorded. Some states pay a very low r&b -like TX @ about $ 155 a day while PA is around $ 300 a day. So a 100K house gifted would mean 645 days of penalty period in TX but PA penalty period would be about half the time. Really you need to know what sort of time frame your FIL is facing.

The penalty period starts on the day of Medicaid application & not the date the transfer happened (this got changed in Bush Deficit Reduction Act of 2005). DRA set a uniformity to how states run their medicaid compliance. By waiting to apply & be ruled ineligible for Medicaid to pay due to transfer penalty, you probably are kinda just making FILs ineligibility period longer unless you can wait it till a full 5 years from the exact date of transfer and then apply for medicaid the day after.

I have a ? for you....you mention FIL not having enough $ to pay the penalty but he has $ to pay his current medical bills..... So does he still have assets? Like savings, investments, whatever $ apart from his monthly income (his SS check & monthly retirement income)? if he does and it's more than 2k, he's not going to qualify for NH Medicaid on that alone even before dealing with the transfer penalty. They have to be impoverished to be eligible for Medicaid. There is no grey area...they have to be poor and "at need" for Medicaid eligibility. It's usually 2k in assets and around $ 2,100 in monthly income. Each state can set the exact amount as each state administers it's Medicaid program within a federal guideline. When I did the application for my mom for TX, it was $ 2,062 monthly income max but now has upped to $ 2,164 and with 2k maximum asset for non exempt assets.

Really truly it's a lot to figure out. Mistakes are costly. Transfer penalties can be complicated. Find an elder law atty - I'd try to get one NAELA certified since he has penalty issues- to review FILs situation. good luck.

Team, are you asking if Medicaid will pay to continue home based care? If so, the answer is no. Everybody ideally want to age in place, in their community, but it is very expensive. Just imagine the financial drain on the system if home care were covered. Too bad about the gift/loan to brother, as this at some point is going to have an impact on your Dad's care. Can your brother pay him back? Even if it is a loan that will be paid back to dad.