Oh no! You applied for Medicaid but the State of
CONNECTICUT says it
will "impose a transfer penalty." What does this mean? What do
you do?
A "transfer penalty" is imposed if the State of Connecticut decides that an applicant for Medicaid, or that person's spouse, "transferred" something for purposes of qualifying for Medicaid. For every $14,542 (changes annually), the applicant is DENIED MEDICAID for one month. The State of Connecticut starts counting the first day of the month the person would have been "otherwise eligible." I go into this a little differently on my page "what if I give it all away." For the home care program, the State of Connecticut doesn't start counting until all the paperwork is done; for a nursing home situation, it's when the assets were "reduced" even if the paperwork wasn't done. This is especially bad if the person is in desperate need of care, in fact, even if the person may die without proper care. I can say this, because it happened to a client of mine. Because of a transfer penalty, my client DIED. But how did this happen? You knew that a gift during the "look-back" can cause a penalty. But nobody gave anything away! Two possible problems can cause this to happen. (1) It's a "transfer" if something goes from the applicant to someone else and the State feels that the applicant did not get fair market value in return. The State's view of what is fair market value may be different than yours. (2) The State gets to ASSUME that the reason for this was "for purposes of qualifying for Medicaid" unless "proven" otherwise. First -- know the exemptions. Some "transfers" are just exempt. If this one fits into the right pigeonhole, and you can explain that to the caseworker, you got yourself out of the jam. In that case don't argue about the value or the motive. Just argue the exemption. What's exempt? Here are SOME important exemptions to know:
But maybe no pigeonhole fits. Now what? I was about to go through a lot of other arguments you can make. Unfortunately, I tend to take a rosy view of your powers of persuasion and argument. But most likely you are not a lawyer who spent three expensive years learning how to persuade and argue effectively. You may be outgunned. You are also likely to be disrespected. You and I might say the exact same thing but I might use fancier words and threaten court and the caseworker might give in to my arguments but not yours. That is -- you may need a lawyer. If the caseworker actually issues a formal notice of intent to impose a penalty you'll only have 10 days to argue about it. Once you lose at that level and the worker reaches a formal decision, you have 60 days to ask for a "fair hearing" (usually done by zoom or similar, or phone call), but for that you REALLY need a lawyer. Even the exceptions above may work better with a lawyer. Especially #4 and #5. This is reality.0 Some disputes are about value. For instance, Mom gave you (son) $20,000 four years ago. Since then you did not live with her but came over and took care of her eight hours a day. You're also an accountant and her power of attorney and did mom's tax returns and paid all her bills. You ought to be able to argue that you "gave back" $20,000 worth of caregiving if you can show what you did, how many hours, what it would be worth. This is harder since they will demand a log or a caregiver agreement. It helps to have a lawyer. Often the issue is motive. For that you have to remember that if you submit "sworn statements," either notarized or written up saying "under penalty of perjury I declare," that is testimony. That's like a witness being in court swearing to something. It counts as proof. It still has to be persuasive but the caseworker can check off the box "sworn statement" as a "verification." The details, the background, WRITTEN UP IN A STATEMENT, or supported by other statements, are important. It helps to have a lawyer to remind the caseworker that a swong statement is proof. (99% of the time, a gift made after the person was already receiving long-term care is not going to fly, however.) Example: Say mom wanted to sell her house and a neighbor offered to buy it and she thought she'd do better than paying a broker commission. She didn't realize the housing market was hot and that the price she was paid was well under market. The state infers that this is a gift. You know that's nuts and that she thought it was a good deal. You might need her sworn statement or the sworn statement of family members as to what she told them. Proof that the neighbor was not a friend or family member. Maybe proof that mom had cognitive decline at the time. A letter from the doctor. It helps to have a lawyer tell you to get more witnesses. Even a gift motive can succeed provided the person had no expectation of needing long-term care. For instance, dad sent his unemployed son money every month so he would not be foreclosed. That wasn't for purposes of qualifying for Medicaid. Or mom paid the down-payment on her son's house when she had plenty of money and was taking care of her sick husband at home and swore he'd never go to a nursing home. That wasn't for purposes of qualifying for Medicaid. There was a reason. "Fairness" usually won't work, at least at the caseworker level.. The dad who sent money to the unemployed son also sent the same amount to his daughter just to be "fair." That one lost. Then I had a case where the applicant (age 80) gave her children $150,000 and a year later had a stroke. She had only retained $40,000, although she had moved to subsidized housing and had a small long-term care insurance policy that covered some home care. I argued that she thought she had enough to cover all her needs when she made the gift -- she was living independently, baby-sat her grandchildren regularly -- and that she believed she had promised her husband that when she sold the house she would give the kids the money. We demanded that if there was a fair hearing, it would have to be at her bedside so she could testify about her motive. We won. But it was hard. Arguing a case is hard. My client who died had a sad story and he didn't explain it well. He was being foreclosed and his sister paid off his mortgage and he signed his house over to her. Even I thought she should have taken out a mortgage on the house instead. What I didn't know was that she had already bailed him out once before, that he had piles of debts, and that he might have been sued if he'd kept the house. There was also the fact that he was bedridden and vulnerable, so I could've argued that he had no real choice. I'll always wonder what might have happened if I, trained as a lawyer, had helped him to fight that penalty. Instead he just took it, didn't hire me, waited for the penalty to expire, did without care, and died. I'm writing this because, while we lawyers like to keep some things to ourselves so you will hire us, I don't want anyone to DIE because they don't know these rules. So if the caseworker talks about a transfer penalty (or you can tell that the caseworker is headed that way) -- take it seriously. But don't take it lying down. And unless you feel really confident about it, get legal help. (Not necessarily from me. There are hundreds of us out there. We make a lot of referrals to other lawyers.) Even if you are broke, you can cut a deal. PERSUADE the lawyer to help you on a payment plan. Use a credit card. It's serious. attorneys, caregivers, and others assisting the elderly. This is not legal advice, and establishes no attorney-client relationship. Accuracy and currency are not guaranteed. The law changes often; this may be out of date. Please report changes, errors, and suggestions to Lisa Davis. |