Important Facts About Medi-Cal: The Transfer Penalty

The second major rule of Medi-Cal eligibility is the penalty for transferring assets. Congress does not want you to move into a nursing home on Monday, give all your money to your children (or whomever) on Tuesday, and qualify for Medicaud on Wednesday. So it has imposed a penalty on people who transfer assets without receiving fair value in return.

This penalty is a period of time during which the person transferring the assets will be ineligible for Medi-Cal. The penalty period is determined by dividing the amount transferred by what Med-Cal determines to be the average private pay cost of a nursing home. The period of ineligibility starts on the first day of the month of the transfer. Example: If the applicant made gifts totaling $90,000, he or she would be ineligible for Medicaid for 18 months ($90,000 ÷ $4,812 = 18.70). Another way to look at the above example is that for every $4,812 transferred, an applicant would be ineligible for benefits for one month. Currently the maximum ineligibility period is 30 months.