Penalty Period Calculator

Calculate Your Client's Penalty Period
of Medicaid Ineligibility

Complete the fields below to calculate your client's penalty period and find out how long your client may be ineligible for Medicaid benefits due to gifts or divestments made during the lookback period.

$

RESULTS

Calculated Divestment Penalty Divisor:
$—/month
Penalty Period:
— months
Anticipated Date of Eligibility:
—/—/—
By submitting information on this fillable form and utilizing our calculator tool, you indicate your understanding and agree that this is for illustration and education purposes only. Users of this calculator tool also agree to our Privacy Policy and Terms and Conditions. This tool is not intended to replace the final calculations for a Medicaid Compliant Annuity plan and its use for that purpose is not recommended.

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Learn more about penalty periods with these FAQs.

The Medicaid penalty period is the period of ineligibility an applicant is subject to if they have made divestments during the five-year lookback period. The penalty period begins when the individual is deemed “otherwise eligible” for Medicaid benefits apart from the ineligible transfer. That is, they meet all other financial and non-financial requirements. The penalty period is based on the total divestment amount and a state-specific figure known as the Divestment Penalty Divisor.

Each state has its own Divestment Penalty Divisor, which is used to calculate a Medicaid applicant's penalty period. This figure is constructed based on the average private pay rate of nursing home facilities in that state.

A divestment is a transfer of assets for less than fair market value. Many people may also refer to these transfers as gifts. Examples of divestments include donating money to charity, giving money or items to loved ones, transferring assets to an irrevocable trust, or selling items for less than fair market value. For cases involving married couples, spouses can transfer assets back and forth without any penalty up until the institutionalized spouse becomes eligible for benefits.

The lookback period is the five-year period before an individual applies for Medicaid. When their application is submitted, the caseworker will look back over the last five years to determine whether they have divested any assets. If the applicant is found to have made ineligible transfers, they will be ineligible for benefits for a certain period of time based on the total amount divested.

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