A Medicaid professional consultant helping an elderly woman to protect her assets and money from the nursing home spend down.

Medicaid Gifting Rules

About transfer of property gifting rules of Medicaid

There are many myths about Medicaid that pertain to gifting rules. These rules can be very complex, often leaving people in a state of confusion. In order to qualify for Medicaid, the recipient must have assets that meet a minimum amount. In many states, this amount is different. It may mean that the recipient can own a home, have a specified amount of money in a bank, own a car and have some personal property. In most cases, anything that exceeds the bare essentials will disqualify an individual. To avoid being rejected when applying for Medicaid, many people will opt to gift away some of their assets, allowing them to become eligible. However, many people believe that if they do this, they will be penalized. Caseworkers for Medicaid will often tell people that they will in fact be penalized for giving their assets away. This is a myth.

It is in no way illegal for any individual to transfer their property to another person in order to qualify for Medicaid. What is illegal is the neglectful act of not disclosing any transfers that have been made.

When an individual gives away some of their assets, Medicaid will then impose a "period of ineligibility." In general, the amount of assets given away is figured out so that it would equal the amount that would have to be paid for one month of nursing home care. So, for every one month of care that is transferred through assets, the individual will be ineligible for one month.

The actual amount of nursing home care per month will vary per state. For example, in Tennessee, the average cost of care for a month is around $2500. This means that is someone residing in Tennessee gives away assets totaling $25,000, they will be ineligible for a period of 10 months.