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How To Qualify For Medicaid (Transfer Of Income And/Or Assets)


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In order to qualify under Medicaid income and asset eligibility limits, it is possible transfer assets and income to someone else.

Transfer in general:

  • If the medical care you need is not what Medicaid refers to as "custodial" or "institutional" (such as long term care in a nursing home), in most states you can transfer income and/or assets and  mmediately qualify for Medicaid.
  • If the care you need is "custodial" (Long Term Care) such as nursing home care, there are penalties for transferring assets or income within a "look back" period (a period of time prior to the need for nursing home care).
  • To learn about custodial care, click here.

There are some transfers of assets that do not result in a transfer penalty. For other transfers of assets for the purpose of becoming eligible for Medicaid coverage of long term care costs, Medicaid imposes a penalty. Rules with respect to penalties are different for transfers before and after February 8, 2006. States have the option of applying the penalty to all Medicaid applicants.

Nursing Home Costs: If you want Medicaid to cover nursing home costs, you have to follow transfer rules very precisely.

Undue Hardship: Federal law allows for an exemption from the transfer penalty if it would cause "undue hardship." Undue hardship exists when enforcing the penalty period for asset transfers would deprive the Medicaid applicant of:

  • Medical care necessary to maintain the applicant's health or life OR
  • Food, clothing, shelter or necessities of life.

While the exemption exists, it is advisable not to rely on it. There is never a way to predict how a decision will be made, or how long a positive decision can take.

Moving Out/Divorce: If the household consists of two people who together have income or assets over the Medicaid limit, people have been known to move out of the house in order for one of the two people to qualify for Medicaid. Some have even been known to get a divorce.

For more information, see:

NOTE: To get an idea of the current cost of different types of care in the state in which you live, go to offsite link

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