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Title 8: Medicaid Page 44 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Transfer of Assets Revised September 13, 2024 Penalties for Transferring Assets To establish the penalty period for transfers made before February 8, 2006: 1. Determine the equity value of all assets transferred in the 36 months before the client applied for Medicaid, other than those transferred to or by a trust. 2. Determine the equity value of all assets transferred into or by a trust in the 60 months before the client applied for Medicaid. 3. Divide the total equity value of the transferred assets by the average monthly cost of nursing services at the time of application to determine the number of months of penalty. Drop any fraction remaining, so the result is in whole months. 4. Start the penalty on the first day of the month assets were transferred.

1. Mr. T transfers $100,000 to his next-door neighbor on April 11, 2005. He enters a nursing facility and applies for Medicaid on June 3, 2006. The worker determines that the transfer was made to qualify for Medicaid. The penalty period is figured by dividing $100,000 by $3,697.55, with a result of 27.05 months. Since the transfer was made before February 8, 2006, the partial month of ineligibility is rounded down to 27 months. Also, the penalty period begins on the first day of the month the transfer was made. Mr. T’s period of ineligibility begins April 1, 2005, and lasts through June 30, 2007. He can reapply for Medicaid nursing facility payment and, if he is otherwise eligible, be approved on July 1, 2007. 2. Mrs. A transfers $3,000 to her daughter on January 11, 2006. She enters a nursing facility on March 3, 2006, and applies for Medicaid payment of her nursing facility care on June 9, 2006. The worker determines that the transfer was made in order to qualify for Medicaid. The penalty period is figured by dividing $3,000 by $3,697.55, with a result of 0.811. Since the transfer was made before February 8, 2006, the result is rounded down and there is no period of ineligibility. To establish the penalty period for transfers made on or after February 8, 2006: 1. Determine the equity value of all assets transferred in the 60 months before the client applied for Medicaid. 2. Divide the amount from step 1 above by the average monthly statewide cost of nursing facility services.