Lookback penalty. Does that mean we pay for 5 months before we qualify?

My Mom had no penalty but this is how it worked for her. She did not have quite 20k. In April I started the Medicaid process. My Mom was placed in a NH May 1st. She paid privately for May and June. During those two months I spent her down to under the 2k Medicaid allows in her bank account. I got them all paperwork needed. July 1, Medicaid started paying. NJ only allows 90days from time of application to spend down, get paperwork together and place the person.

Yes. You don’t apply for LTC Medicaid before you go into a facility and need to pay for facility.

Not exactly, the penalty is basically an equation based on the daily room & board reimbursement paid by the state to a facility. Division problem.

Say your state Medicaid pays a NH $185.00 a day R&B reimbursement. The amount of $ gifted by your elder within the 5 yr lookback was $25,000.00. 25K divided by $185 = 135 DAYS of ineligiblity. So basically 4 & 1/2 months of ineligiblity. Penalty date starts the day she signed off and filed for LTC Medicaid is my understanding.

Medicaid daily reimbursement figure is very important. Some states pay a low figure, like $165 a day, so will take longer to get past, while others pay over $300 a day, so penalty goes quicker.

Now there’s another rub in this; for the # of days of ineligiblity, the NH can determine if they are willing to accept the lower Medicaid day rate or if they want to charge you the full daily private pay rate. It seems to be open to some degree of negotiation. If you know going into the NH, that a penalty is looming for when she applies for Medicaid and she has a spend down to do before even applying for Medicaid, I’d try to have this worked out before you sign off on her admissions contract. If there is an obvious penalty, the place is likely to want you to personally sign off to be financially responsible for her bill.