If a gift or transfer is made within the “look back,” Medicaid will calculate a period of ineligibility, call the “penalty period.”
The penalty period is calculated by dividing the amount or value of the transfers by Medicaid’s published “Regional Rate” for nursing home care in the geographic area where the application is filed.
In 2019, the Regional Rate for New York City is $12,419. So, for example, a transfer of $125,000 within the “look back” period would result in a penalty of 10 months of ineligibility.
This is a powerful remedy for Medicaid. Nursing home care in New York City is likely to cost at least $15,000 per month. So, a $125,000 transfer could result in a penalty period that will cost $150,000 or more.
The Regional Rate for Westchester County is currently $12,636. So the result in Westchester would be very similar.