Medicaid Penalty Changes in NC Effective January 1, 2007


On February 8, 2006, the federal government implemented increased restrictions on gifts made before applying for Medicaid coverage.  North Carolina has issued proposed rules to make the penalties effective January 1, 2007, although it is possible they may take effect a month or two later.

Under the rules still in effect for the remainder of this year, gifts made within three years (five years for gifts to trusts) are reviewed.  There is a one-month period of disqualification for every $4,800.00 given away, beginning at the date the gift was made.
However, beginning January 1, 2007, the look-back period for all gifts will be fiveyears.  In addition, the penalty begins after the person enters the nursing home.
This obviously makes gifting a much less useful strategy for qualifying for Medicaid.  Those North Carolina residents who wish to make gifts in a attempt to become eligible should do so this year.  Do not do so without the advice of an elder law attorney, however.  There are also tax and other issues that should be considered.
Address: 1414 Raleigh Rd Ste 203, Chapel Hill NC 27517
Phone: 919.636.0950 | Toll Free: 800.201.0413 | Fax: 919.493.6355 |