Dallas, TX (Law Firm Newswire) November 23, 2011 – The Texas Department of Aging and Disability Services has increased the state’s daily average private-pay rate for nursing home care, which affects the transfer of assets divisor for the Medicaid penalty period. The new rate of $142.92 is used to calculate transfer penalties for individuals requesting Medicaid services who have transferred assets for less than fair market value within five years of applying for Medicaid assistance. The new rate is effective for all persons with case actions starting September 1, 2011.
“Transfers of assets play a big role in your Medicaid benefits,” said Dallas elder law attorney John Hale of The Hale Law Firm, P.C. “For example, if you disclaim an inheritance, give away a car, money, or other property, or even sell a home for less than its tax appraised value to move into a nursing home, you could be penalized and have to come up with the monies for your care. Even though you may be otherwise eligible for Medicaid, no benefits will be paid until the transfer penalty period expires. This can produce devastating results, so any big events like this should be planned beforehand with legal guidance.”
The Medicaid transfer penalty period affects individuals in state-supported nursing homes and long-term care facilities as well as those that have home or community-based waiver services who have given away or sold property for less than fair value. The penalty period is calculated by dividing the amount transferred for less than fair value by the penalty divisor of $142.92, which represents the average daily private-pay rate. For example, if a person disclaimed an inheritance of $20,000 within five years of applying for Medicaid benefits, this would produce, a 139 day penalty period as the calculation is rounded down.
“If a transfer penalty is imposed, the question then becomes how a Medicaid recipient can afford to pay for long-term care,” said Hale. “There are important exceptions to the transfer penalty rules; however, the Medicaid recipient has the burden of proving that the exception applies.”
The penalty start date does not begin until the first day of the month in which all eligibility requirements have been satisfied. In instances where overlapping transfers have occurred since Sept. 1 of this year, the transfers are combined and divided by the same daily rate. Later transfers will not relate back to the date of the initial transfer for purposes of applying the five-year look back rule.
“These penalties carry big consequences beyond the financial ones,” said Hale. “Family disputes can erupt as children debate who should pay for mom’s nursing home care. Unless a transferred asset is returned, the penalty period can be devastating to you and your family.”
Individuals and their loved ones should consult a skilled Dallas elder law attorney to adequately plan for their long-term care, preserve access to government benefits and protect their assets. To learn more about the Dallas elder law firm and Dallas estate planning, call 972.351.0000 or visit http://www.thehalelawfirm.com/.
The Hale Law Firm
100 Executive Court, Suite 3
Waxahachie, TX 75165