If any disqualifying transfers were made during the look-back period, a divestment penalty period is imposed. The divestment penalty period is a period of time during which an otherwise eligible Medicaid applicant will nonetheless be ineligible for Medicaid.
The penalty period is intended to correspond to the period of time during which the individual could have paid for institutional care had he or she not transferred assets for less than fair market value. The transfer penalty is calculated by dividing the aggregate amount of uncompensated transfers made during the look-back period by the statewide monthly average lowest semi-private room rate for Medicaid certified nursing facilities, also known as the Divestment Penalty Period Divisor.
There is no limit on the length of the penalty period. For example, if an individual in Wisconsin made $465,850 in transfers for less than fair market value during the look-back period, his or her penalty period would be 74 months, if the application was made in Wisconsin in 2009 ($465,850.00 divided by $6,259). Therefore, in cases in which the penalty period would be longer than the applicable look-back period, Medicaid benefits should not be sought until 60 months after the last disqualifying transfer.
Your state-specific Divestment Penalty Period Divisor, along with various other state-specific information, can be located under the Attorney Resources section of the site. These figures update throughout the year, so remember to check back periodically to ensure that you have the most up-to-date figures.
