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Any of the following circumstances are sufficient to establish that the institutionalized person or community spouse transferred resources without an intent to qualify for Medicaid. This list is not intended to be all-inclusive; in other situations, the person’s intent must be evaluated on a case-by-case basis to determine whether a divestment occurred. 17.2.6.1.1 Sufficient Resources to Cover Five Years of Long-Term Care A transfer by an institutionalized person or their spouse who, immediately after the transfer, still had sufficient financial resources (including long-term care insurance) to cover five years of long-term care is an allowed divestment and doesn’t result in a penalty period. For the average monthly nursing home cost of care in effect at the time of the transfer, see SECTION 39.4.6 INSTITUTIONAL COST OF CARE VALUES (view history pages for prior year amounts). This cost per month multiplied by 60 months provides the amount to compare to the income, assets, and insurance held by the individual immediately after the transfer. Example 1 Lucius had a money market account. Lucius gave his nephew a graduation present worth $25,000. After the gift, Lucius’ money market account still had enough funds to pay for more than five years of long- term care services. Two years later, Lucius suffered a traumatic brain injury and was institutionalized. Because the cost of specialized nursing home care is significantly greater than a regular nursing home, Lucius depletes his money market account and must apply for Institutional Medicaid after only two years. Because Lucius still had enough money to pay for five years of care at a regular nursing home after he gave the gift to his nephew, the gift is an allowed divestment and doesn’t result in a penalty period.

Example 2 Pierce had an investment portfolio with assets that could pay for more than five years of long-term care services. Pierce paid for his granddaughter to take a trip to Europe. Immediately after the transfer, his investment portfolio still contained enough funds to pay for more than five years of long-term care services. Later, his investments plummeted in value due to the stock market. Before the stock market recovered, he entered a nursing home and quickly spent his remaining assets on his care. Pierce then applied for Medicaid to continue receiving his necessary long-term care services. Because Pierce still had enough assets to pay for his long-term care for five years immediately after he made the gift to his granddaughter, the gift is an allowed divestment and doesn’t result in a penalty period even though the gift was in Pierce’s look back period. 17.2.6.1.2 Sufficient Resources to Cover Long-Term Care for Remaining Life Expectancy A transfer by an institutionalized person or their spouse is an allowed divestment and doesn’t result in a penalty period if both of the following conditions are met: • The institutionalized person’s life expectancy was less than five years at the time of the transfer (see SECTION 39.8 LIFE EXPECTANCY TABLE). • Immediately after the transfer, the institutionalized person still had sufficient resources (including long-term care insurance) to pay for their long-term care services for their remaining life expectancy For the average monthly nursing home cost of care in effect at the time of the transfer, see SECTION 39.4.6 INSTITUTIONAL COST OF CARE VALUES (view history pages for prior year amounts). This cost per month, multiplied by the number of months in their remaining life expectancy, provides the amount to compare to the income, assets, and insurance held by the individual immediately after the transfer.