How a Medicaid Penalty Works

I’ve written quite a bit over the years about nursing home Medicaid penalties. Medicaid penalties can be triggered by intentional gifts during the look back period or accidental mistakes by families moving money or assets around without an experienced Woodlands Elder Law attorney. One aspect of the whole Medicaid penalty system that I think I need to cover in more detail based on recent conversations with new clients is exactly what a Medicaid penalty is and how it works.

A common misconception is that a Medicaid penalty is simply a fine where the government says you owe X amount of dollars based on the transactions creating the penalty. For people that mistakenly believe this is how a Medicaid penalty works it makes the penalty appear a lot less harmless than it actually is. After all, if the Medicaid applicant doesn’t have the money to pay the penalty then they just don’t pay it and there are no real bad effects. Sounds harmless, right?

Unfortunately a Medicaid penalty does not work like a fine. A Medicaid penalty is based on time, not money. So if a Medicaid applicant does something that creates a penalty the government does not ask for money as a penalty, they simply deny nursing home Medicaid benefits for a certain amount of time. With no Medicaid benefits and no money left to pay the ever increasing nursing home bill the Medicaid applicant will then likely face eviction proceedings from the nursing home. This is why a penalty is a big deal and should not be taken lightly. The results can be disastrous.

Don’t put your loved one on the wrong end of a Medicaid penalty. If your family needs to qualify for nursing home Medicaid benefits or protect assets then work with an experienced Medicaid attorney.  I am committed to protecting assets to the full extent of the law and creating Medicaid eligibility as soon as legally possible. Do not pay another nursing home bill that you may not have to.

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