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If you are in a nursing home and are asking Medicaid to pay the nursing home’s bills, Medicaid will refuse to do so for a period of time if you have made any gifts or transfers of your assets during the five year “look back” period. The number of months that you are not eligible for Medicaid benefits is called the “penalty period.” Here is an example of how the penalty period works. Let’s say you live in New York City, and you gave your son or daughter a gift of $134,000 in January 2020. If you needed nursing home care in 2022 (or at any point up to January 2025), and you filed a Medicaid application, your gift would fall within Medicaid’s look back period.

Medicaid would then perform a calculation as follows: the amount or value of your gift would be divided by Medicaid’s monthly “regional rate” (the amount is set by Medicaid) for nursing home care.  The result is a number that represents the period of time in months that you are not eligible for Medicaid nursing home benefits. The regional rate applicable to you depends on your county of residence within New York State.

In New York City, the Medicaid regional rate for 2022 is $13,415. In our example, the calculation is thus $134,000 divided by $13,415, resulting in a “penalty period” of approximately 10 months. During this time, someone other than you would have to pay for your care.

Don’t let the “look back” and the “penalty period” deter you from seeking the advice of an Elder Law attorney. He or she will likely have a strategy to save you a significant amount of money, even if you made a gift or transfer that subjects you to a “penalty period.” For a discussion of the strategies that might apply in nursing home cases, click to Find Your Situation.
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